Researchers are worried that important gains in education attainment and future life chances are being reversed.
Researchers at Oxford University asked more than 9,000 19-26 years old in, India, Peru and Vietnam about things like their education, access to food and mental health.
Despite many young people in developing countries now returning to education or employment, interrupted learning, less reliable work, food shortages and significant mental health issues are widening inequalities, according to the report.
The COVID-19 phone survey by the Young Lives research team revealed that, despite encouraging signs that many young people are getting their lives back on track, a 'complex and uneven picture is unfolding.'
'On the surface, things are improving for many, following the initial shock of the pandemic, but beneath that inequalities are clearly widening. COVID-19 could not only halt progress, but could reverse important gains in educational attainment and future life changes,' says Dr Marta Favara, Deputy Director, Young Lives at Work.
The Prime Minister's Special Envoy on Girls' Education, Helen Grant says, 'Coronavirus has made girls' education an even more urgent priority, with 1.6 billion children around the world out of education at the peak of school closures.
'For the world's poorest girls, being out of school puts them at even greater risk of early marriage, forced labour and violence.
'The UK is backing research by Young Lives to better understand how to overcome the barriers stopping girls from realising their full potential. We are determined to get 40 million more girls in school in low and middle income countries by 2025 and a third more girls reading by the age of 10.
'That is why the UK and Kenya are co-hosting a Global Education Summit in July to urge world leaders to invest in getting children into school and learning - to help economies grow, tackle poverty and empower women everywhere.'
The Oxford University researchers found that a majority of students are now returning to their studies, but many classes remain on-line and quality is uneven.
A persistent digital divide has made learning almost impossible for young people without internet access and a device to learn, resulting in a lost year of learning.
In terms of returning to work they say an employment crisis continues in Peru and a clear gender gap is emerging.
Whilst the majority of young people have been able to return to work, the report found job recovery has been significantly slower for 26-year-old women.
The research also revealed that the poorest households are most likely to go hungry - many young people reported that they had run out of food at least once over the last year.
Whilst there have been improvements in young peoples' reported mental health issues as countries have lifted lockdowns and restrictions, most notably in Vietnam, the pandemic continues to take a heavy toll, at a time when access to mental health services is likely to have been significantly disrupted.
Dr Favara added: 'Our findings show that the poorest, most vulnerable young people are struggling to recover from the pandemic. Additional stress caused by interruptions in their education, increased food insecurity and increased household duties may be directly contributing to worsening mental health amongst the poorest young women.'