The Persistence of Poverty from Childhood to Early Adulthood in Australia*

Drawing on 22 years of longitudinal data from the Household, Income and Labour Dynamics in Australia Survey, we investigate how exposure to poverty in childhood is associated with poverty risk in early adulthood. We find a substantial and highly non‐linear gradient in poverty persistence from childhood into early adulthood. Compared with children from households with an income between 150 per cent and 200 per cent of the poverty line, those growing up below the poverty line have an early‐adulthood poverty rate that is 22.4 percentage points higher on average, whereas those growing up in near‐poverty, with an income between 100 per cent and 150 per cent of the poverty line, have a rate 8.7 percentage points higher. These associations remain substantial after controlling for childhood family characteristics, indicating that childhood poverty remains a strong marker of later‐life disadvantage. We then examine whether this persistence is related to differences in educational attainment, employment, partnership, family structure and health in adulthood, and the extent to which these outcomes are in turn associated with poverty risk. Substantial associations between childhood poverty and early‐adulthood poverty remain even after accounting for these factors. While our analysis does not identify causal impacts of childhood poverty, our findings nonetheless suggest that policies directly addressing childhood poverty should be considered alongside downstream interventions focused on education, employment and family stability. We also find that these associations are considerably larger for children growing up in single‐parent families, suggesting that these families warrant particular policy attention.