Those who have been caught in natural disasters will also earn about $100,000 less per person, are more likely to become homeless and have a higher probability of experiencing a mood, anxiety or substance disorder- all of which will cost the Australian economy up to $6.2 billion per year.
More than 1.4 million young Australians are subject to a disaster or extreme weather event in an average year, research from UNICEF Australia and Deloitte Access Economics has found.
And as climate change worsens, disasters are likely to become more frequent, putting more kids at risk of falling behind and piling pressure on the Australian economy.
UNICEF Australia policy and advocacy manager Nishadh Rego says children were particularly prone to disaster consequences due to their cognitive and psychological characteristics.
"When young Australians experience these disasters in the early stages of their lives, the impacts can continue to be felt well into their adult lives," he said.
The report says kids are particularly prone to the distress of disasters, and need special programs. (Rob Blakers/AAP PHOTOS)
Those who had experienced a disaster were 1.3 to 4.5 per cent more likely to have psychological distress which could lead to increased aggression, issues with sleep, anxiety, and bed wetting among older children.
And these impacts can persist for years, with one study showing that children were 15.7 per cent more likely to have a lifetime mood, anxiety or substance use disorder if they faced a disaster before the age of five.
This could cost $162 million in mental health services, every year.
Natural disasters also dent children's educational outcomes.
One study revealed schools exposed to major bushfires had lower reading and numeracy scores because of disrupted attendance, destroyed school infrastructure and financial distress, making affected students 4.2 per cent less likely to finish year 12.
These events also chip away at their future income and could lead to $2.9 billion in lost potential earnings - about $100,000 per person over a lifetime.
"In the context of the cost of living crisis, the potential reduction in future earnings and lost income is a big concern," Mr Rego told AAP.
Exposure to floods and bushfires also makes children marginally more likely to experience homelessness, which would increase the cost of homelessness services by hundreds of thousands of dollars.
Mr Rego has called on the government to invest in programs, policy and research specifically designed to support and understand children and young people.
This demographic's vulnerability and challenges are distinct from those of adults and must be addressed in things like the government's national climate risk assessment and disaster recovery programs.
"If we want to be as resilient as possible in the future - to multiple intersecting crises - we need to focus on building resilience with children and young people today," Mr Rego said.
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