One in 10 young people feel they cannot cope with day-to-day life - with those not in work, education or training more than twice as likely to feel this way - according to a Prince's Trust survey.
The annual Youth Index report questioned 2,136 16 to 25-year-olds.
A total of 27% of respondents in work feel down or depressed always or often, compared with 48% who were not in education, employment or training.
It also found 22% did not have someone to talk to about their problems.
The 2012 report discovered 52% of so-called NEETs said they often or always felt depressed.
The index, now in its fifth year, gauges young people's happiness across a range of areas, from family life to physical and mental health.
Despite the pressures many are facing, it shows relatively slight changes in overall confidence and happiness amongst young people, says BBC social affairs correspondent Alison Holt.
Martina Milburn, chief executive of The Prince's Trust, said: "A frightening number of unemployed young people feel unable to cope - and it is particularly tough for those who don't have a support network in place.
"We know at The Prince's Trust that it is often those from the most vulnerable backgrounds who end up furthest from the job market.
"Life can become a demoralising downward spiral - from a challenging childhood into life as a jobless adult. But, with the right support, we can help get these lives on track."
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