Young adults are tomorrow’s workforce in times of aggravating skill shortage. Their mental health and well-being decide over their labour market success and influence the future development of the economy. Over the course of the Covid-19 pandemic, associated containment measures, and the economic downturn, the mental health of young people declined – more severely than for older age-groups. A new IAB study shows that being employed or non-employed during the pandemic played an important role for the well-being of young adults.