Racism against Aboriginal children in Kalgoorlie is leading to anger, unemployment and crime in later years, the Guthoo youth report has observed.

The report was prepared by Koya Aboriginal Corporation on behalf of the Department of Prime Minister and Cabinet, to investigate antisocial behaviour and high levels of disengagement among young people in the wake of 14-year-old Elijah Doughty's death in 2016.

Tensions in the community hit crisis point when Elijah was killed after he was pursued by a 56-year-old man driving a ute.

The driver was later found not guilty of manslaughter and sentenced on a lesser charge of dangerous driving occasioning death.

Dr Kickett-Tucker said racism and stereotypes were breeding disadvantage among Aboriginal teenagers in Kalgoorlie. ( Supplied: Cheryl Kickett-Tucker )

In the aftermath of the event and trial, Kalgoorlie was described as a "tinder box" of racial unrest.

More than 70 per cent of young people aged between 11 and 17 who identified as Aboriginal in the town were surveyed for the Guthoo Report.

Guthoo Youth Report editor Cheryl Kickett-Tucker said children with low self-esteem had issues later in life.

"They won't go to school, they're not attentive at school, they close off from their friends, they get caught up in the wrong cycle and the wrong behaviours … and play out what the rest of society has pigeonholed them to be, which is naughty, bad, terrible kids," she said.

"But when I went up there and I met all these kids, I was blown away by their talent and their generosity and their love."

Disadvantage created through stereotypes

Dr Kickett-Tucker said racism and stereotypes were breeding disadvantage among Aboriginal teenagers in Kalgoorlie.

"All the [Aboriginal] kids were stereotyped as being bad and negative and that there was something completely wrong with them, but that's not true," she said.

"There is a cohort of kids that get up to mischief and do the wrong thing, but they're not all the same.

"We actually identified kids with enormous talent and enormous resilience and forgiveness, despite how they were treated.

"But unfortunately we tend to look at the deficits."

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The report found young people had low levels of self-esteem about their identity and "no or limited" strategies to cope with racism.

"You would have a kid from about seven or eight [years old] who perhaps every day, something would happen to them, and they didn't have the racial coping strategies in order to deal with it," Dr Kickett-Tucker said.

"So their way of dealing with it was either be aggressive or completely just walk away … and as kids got older, they got more angry.

"They only have two options. It's kind of like the flight or fight response, which is not good psychologically, because in life, whether you're Aboriginal or not, a child needs a range of strategies in order to deal with matters that come into their life."

Scared to walk around the town

Dr Kickett-Tucker said responses to survey, which provided information for the report, were alarming.

She said a third of those surveyed were found to be experiencing high or very high levels of psychological distress.

"That tells me that a third of the kids were traumatised and vulnerable children who had a mental, social and physical issue."

Dr Kickett-Tucker said racism and discrimination affected every domain of Aboriginal wellbeing.

The report also found a third of Aboriginal teenagers in Kalgoorlie were scared to walk around the town and would not go to the police in an emergency.

Respondents shared their experiences of boredom, racism and how the town felt after Elijah's death.

"I find Kalgoorlie a bit racist because whenever I go in a store, the shopkeeper always follows me," one response said.

"A lot of people in Kalgoorlie has said there's a lot of bad things happening now than before," another respondent said.

Kids want to work

A candlelight memorial for Elijah Doughty. ( ABC News. )

Dr Kickett-Tucker said the stress and trauma experienced by the young people stood in the way of employment.

"One of the big issues is the kids wanted to have a job," she said.

"There is a lot of issues there, but what we can do is create an employment and training pathway."

In response to the report, a spokesman for Indigenous Affairs Minister Nigel Scullion said the Government would work with community groups such as the Goldfields District Leadership Group and the Kalgoorlie Aboriginal Community Residents Group.

The spokesman said the department would determine how to provide regular engagement with families in Kalgoorlie-Boulder through these existing groups.