There has been a spike in severe psychological distress in young Australian adults under 35, according to new analysis from The Australian National University (ANU).
The study - which tracked 3,155 Australians - is the first-of-its-kind to compare mental health data before and during the COVID-19 pandemic.
"Young Australians aged 18 to 24 and those aged 25 to 34 are significantly worse off in terms of mental health than those who are older," Associate Professor Ben Edwards, from the ANU Centre for Social Research and Methods, said.
The report says the proportion of 18- to 24-year-olds experiencing severe psychological distress increased from 14 per cent in February 2017 to 22.3 per cent in April 2020.
Severe distress for adults aged 25-34 years old climbed from 11.5 per cent to 18.0 per cent.
The survey also showed people in the US had higher levels of psychological distress than in Australia.
However, younger Australian adults had similar distress to Americans the same age.
"While the benefits of social distancing and lockdown have been large largely to do with physical health, the downside has been the impacts on young people's mental health," Associate Professor Edwards said.
"Reductions in employment opportunities are having a significant impact on Millennials and Generation Z. They don't have the kind of financial buffer older Australians have.
"This will have a long-lasting impact on young people's lives. We need to consider what we can do to address the needs of our youth."
However, Australians are more hopeful about the future than people living in America.
In Australia, 59 per cent of people reported being very hopeful compared to 52 per cent in the US.
"Almost two-thirds of Australians say they feel hopeful about the future at least three to four days of the week," Associate Professor Edward said.
"Feeling hopeful can soften some negative mental health impacts."