The study by Fight Crime: Invest in Kids, a national advocacy group, documents how bullying spawns loneliness, depression and suicidal tendencies among its victims and foreshadows crime and violence by perpetrators.
"Kids who are bullied are five times more likely to be depressed than other kids, the boys are four times more likely to be suicidal, and the girls who are eight times more likely to be suicidal," Sanford Newman, president of Fight Crime, told CBS Radio News.
Still, not much has been done to prevent bullying in U.S. schools, the report said.
The group's supporters include this year's Miss America, Erika Harold, who was bullied in ninth grade and has been speaking about that experience during her reign.
"It started out with people calling me names, and then it got worse," Harold said. "They threw things at me, they vandalized my house, and they sang nasty songs about me in school hallways and classrooms. It got so bad that I felt like I was in danger physically."
Bullying is defined as aggressive behavior by one person or group carried out repeatedly and over time and targeted at someone less powerful.
The report said for children in grades six through 10, nearly one in six, or 3.2 million, were victims of bullying each year and 3.7 million were bullies.
Nearly 60 percent of boys who researchers classified as bullies in grades six though nine were convicted of at least one crime by the age of 24; 40 percent of them had three or more convictions by 24, the report said.
"The fact that a kid is bullying another is an 'early warning' for us that that kid is headed for trouble," said Newman.
The victims may also be headed for trouble, he said. "Three-quarters of the attackers in the school shooting cases have been kids who were seriously bullied."
Bullying prevention programs are relatively inexpensive, the report said. For example, it costs about $4,000 to train someone to administer an anti-bullying program in a large school district, but $100,000 to put a child with emotional problems in special education for 12 years, the report said.
There are additional personnel costs but the report said federal money for safe and drug-free schools often will cover those expenses.
"For the kid who's being bullied, usually there's an imbalance of power, so that kid needs to get some help," said Newman. "It's important that the adults not say 'Well, stick up for yourself' but that the adults stick up for that kid and take firm action to stop the bullying."
A 1998 study by Vanderbilt University estimated that each high-risk juvenile prevented from adopting a life of crime could save the country between $1.7 and $2.3 million.
Fight Crime: Invest in Kids is a group of over 2,000 law enforcement officers and victims of violence.