Researchers from Edinburgh Napier University found that 20% of those out of work between the ages of 18 and 24 are still without work 10 years later.
The study team, based at the university's Employment Research Institute, say their findings reveal the extent of the long-term impact of youth unemployment.
The study raises fears that Scotland could be headed for a lost generation of young people who have struggled to find work, with youth unemployment among 16 to 24-year-olds rising from 86,000 to 104,000, according to the latest figures.
Professor Ronald McQuaid, who led the research, said: "The effects of young people being out of work for long periods mean they are more likely to be unemployed or to have lower incomes even decades into the future.
"It is important that the various governments, as well as other agencies, work closely together to reduce this scourge and to help young people get into and remain in work, or give them realistic and meaningful work experience alternatives."
The study focused on 607 people over a decade between 1998 and 2008.
The results found that 20% of those unemployed or in low-paid work in 1998 were still in similar situations in 2008. Of those who had a job in 1998, only 11.2% were shown to be unemployed or in low-paid work a decade later.
The length of time a young person spends unemployed was also found to be a significant factor in their future prospects.
A strong link was discovered between the likelihood of being unemployed in 2008 and the number of weeks spent in unemployment five or 10 years previously.
Funded by the European Union, the research forms part of a wider project called Workable, which involves analysts from nine countries. It aims to find out how unemployed young people can be better supported.
Mr McQuaid added: "Our research also suggests confidence plays an important aspect in the success of young people in the labour market.
"Data showed losing confidence was associated with negative results like less pay, a higher likelihood of unemployment and lower life satisfaction."
Ian Tasker, assistant secretary of the Scottish Trades Union Congress, said efforts must be made to find young people jobs to avoid a crisis in the future.
He said: "This report supports our position that the UK Government has to come forward with proposals to address youth unemployment or we will be faced with another lost generation."