Children who grow up in poverty are 5 times more likely to be poor young adults: new study

About 757,000 Australian children aged under 15 lived in poverty in 2022-23 – more than all the people living in cities of Geelong, Newcastle and Wollongong combined.

That’s about one in six Australian children, according to the latest estimates from the Australian Council of Social Service (ACOSS) and UNSW Sydney.

But what happens to these children as they grow older? Do the disadvantages of growing up below the poverty line disappear as they finish school, find jobs and establish their own households?

Our research, recently published in The Economic Record, suggests childhood poverty casts a long shadow, affecting young Australians well into their 20s and 30s.

Lasting effects of a poor childhood

We used data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, which has followed Australian households since 2001.

We examined 2,205 people whose childhood household incomes were observed in at least three years, and whose incomes were known at least once again from age 24. This allowed us to examine whether growing up in poverty was associated with an increased risk of experiencing poverty as adults, aged 24 to 35.

Australia does not have an official poverty line. So we defined poverty using a relative income measure, widely used in international research. This takes into account household disposable income (after taxes and government payments, such as family tax benefits) and is adjusted for household size.

In dollar terms, the poverty line we were looking at sits at about A$72,000 for a couple with two children, and about $55,000 for a single parent with two children.

We found children growing up below the poverty line had a 22.4 percentage points higher risk of living in poverty in their 20s and early 30s than those who grew up in households with incomes between 150% and 200% of the poverty line.

To be clear, 200% of the poverty line, the upper limit of the childhood income of the reference group, is still not even close to being wealthy. It’s simply the median income: about $144,000 for a couple with two children.

What this means is that Australians who grow up poor face a 27% risk of being in poverty in early adulthood, in contrast to just 5% in the reference group. That’s more than five times the risk.

We also looked at others who grew up in near-poverty, with household incomes between 100% and 150% of the poverty line, or roughly $72,000 to $108,000 for a couple with two children. They also had a higher poverty rate in early-adulthood: 8.7 percentage points higher than children from the reference group.

By contrast, we found no statistically significant differences in early adulthood poverty between the income group just below the median and those who grew up in households with higher incomes.

A ‘double whammy’ for kids from single-parent families

Australia has 1.2 million single parent families. Children in those families are especially vulnerable to poverty persisting into early adulthood.

According to 2026 ACOSS–UNSW research, 37% of children in sole-parent families were living in poverty in 2022–23, compared with 11% of children in partnered families.

Low-income single-parent families face compounding pressures: even beyond obvious financial pressures, one parent also has to carry out all the unpaid work of child care and household tasks.

Not only are children in single-parent families more likely to experience poverty, our research showed that poverty is more persistent into adulthood, likely because of those compounding pressures. It’s a double whammy.

In August 2025, Swinburne University researchers surveyed 2,590 Australian single parents, who were mostly women.

They found almost four out of five single mothers (78%) spent “a lot” or “almost all” of their time worrying about or planning for their family’s financial wellbeing. As one respondent said:

I need more money. The financial stress feels untenable.

What makes poverty persist into adulthood?

We examined several possible reasons why poverty is more likely to last into later life. These included educational attainment, reduced employment, lower rates of partnering and poorer health.

We found people who grew up in more disadvantaged households were generally less likely to complete post-school qualifications, be employed or live with a partner.

They were also more likely to be single parents. Some health measures were also associated with childhood economic circumstances.

These adult outcomes are themselves associated with poverty risk. But even when we accounted for them, the association between childhood poverty and early-adulthood poverty remained substantial.

What can we do about it?

Our research doesn’t isolate a single cause of childhood poverty. But our findings do strongly suggest policies focused on reducing poverty in families with children can deliver lasting benefits.

To significantly reduce adult poverty, we need more focus on directly reducing economic hardship in families with children, especially those from low-income single-parent families.

In 2023, the Albanese government boosted financial support for low-income single parents, raising the age cut-off for the Parenting Payment (Single) until the youngest child turns 14. That change was expected to help at least 57,000 single primary carers, who were mostly women (91%).

But more is still required, such as targeted increases to Family Tax Benefit Part A payments.

And if we want to track the success of policy changes in reducing long-term poverty, we need better evidence. That means more long-term studies, following individuals over their lives from kids to adults.

Then we would be able to better identify the key factors keeping Australians locked into poverty for decades – or helping them escape it.

Read more: Many parents – mostly mothers – lose family payments from the first dollar they earn. Here’s how we could fix it