French Prime Minister Manuel Valls on Monday proposed new measures worth 500 million euros (570.75 million U.S. dollars).
The move comes after public anger over a planned labor code reform.
"The government is listening. It understands the youths' worries," Valls said in a statement.
At a meeting with eight students and youth organizations, French Premier announced new subsidies worth between 100 euros and 550 euros for about 126,000 new graduates suffering from poor economic situations. He pledged to prolong their study-grant for four months to support them to find a job.
With a large slice of jobseekers aged between 18 and 25 years, Valls said he would impose additional taxes on short-term contracts to encourage companies to recruit young workers on full-time contracts.
He also promised aid to apprentices and students, after youth and trade unions took to the streets across French cities on Saturday -- the sixth such action -- calling for a withdrawal of proposed labor reforms.
"With the plan presented today, the government continues to mobilize exceptional means and at the same time to continue its action not to settle a dispute, but to respond to serious concerns that require a lasting response," Valls said.
William Martinet, leader of France's main student organization UNEF, welcomed the new announcements addressing youth concerns. However, he said he would keep protesting the reforms.
With the French unemployment rate at 10.2 percent, the Socialist government plans to reform labor rules by making layoffs easier, reducing overtime pay and economic redundancies and renegotiating working hours and holidays.
French unions and leftist politicians, however, say such a move would create more low-paid jobs and further weaken workers' receipts.