Mrs Hodge said that the forthcoming youth Green Paper would contain plans to ensure that young people had more structured out-of-school activities, rather than being left to their own devices in youth clubs.
Speaking at an Institute for Public Policy Research debate, she revealed details of research carried out by London university's institute of education, which looked at the impact that youth activities had on young people born in 1970.
Mrs Hodge said: "Just 'hanging out' not only does nothing for young people but the research tells us it can have negative outcomes.
"They found that if young people spent time in places without some kind of focus and organisation, and that could be as little as organising a football match, they were more likely to have poor educational outcomes, more likely to offend and more likely to end up as smokers.
"Looked at baldly, this research tells us that these young people would have been better off at home watching telly than spending their time with others in this way."
The minister said afterwards that she had witnessed an example of such poor provision in Lewisham, south London, where she had seen a youth club with nothing to offer its teenagers but a pool table.
The youth Green Paper, whose publication has been delayed until Februrary, is expected to contain plans for a smartcard for teenagers which would allow them to pay for a range of out-of-school activities from sports to theatre visits. It will also outline schemes to provide better and earlier intervention to improve pupils' behaviour and help schools offer "exciting and enjoyable activities" to their pupils.