This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: About 757,000 Australian children younger than 15 lived in poverty in 2022–23—more than all the people living in the 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.
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 onward. This allowed us to examine whether growing up in poverty was associated with an increased risk of experiencing poverty as adults, ages 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-point 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.
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