In 2018 13.6% of the Australian population live in poverty, which is significantly higher than in other developed countries.
To prevent poverty, the Australian Government joined a series of sustainable development programs in 2015, which aim to end all forms of poverty and reduce the proportion of men, women, and children of all ages living in poverty in all its dimensions by at least half by 2030 through income support and social housing (Remedial policy).
However, unsuccessful results prove that the main issue is to understand the origins and underlying mechanism of poverty and to implement preventive policies that deliver better socio-economic outcomes for disadvantaged members of society while not harming the national budget in the long run. In this respect, the researchers believe that the analysis of child poverty could be a possible solution, as some factors like lower educational opportunities in childhood are strongly correlated with poverty in adulthood.
With the support of the Paul Ramsay Foundation, a group of researchers carried out data analysis on the intergenerational transmission of poverty, focusing on the link between children's economic situation and their economic situation as young adults. The research was based on the nationally representative Australian Longitudinal Household Survey, the HILDA survey, which contains data for 18 years over the period 2001-2018.
The survey produced the following results:
- Children who grew up in poor households are 3.3 times more likely to be affected by poverty in adulthood than children who grew up in never-poor households.
- The longer a child has lived in poverty, the poorer the results in adulthood.
- Worse socio-economic outcomes in terms of educational attainment (obtaining a university degree, labour market performance for full-time employment), hourly wage (23% higher), health, and even overall life satisfaction in early adulthood.
Research also draws attention to the role of potential mediating factors, such as family relationships and dynamics, socio-economic characteristics of the neighbourhood, educational opportunities and outcomes, and health and access to health care in the intergenerational transmission of poverty, which could help to address this problem. It is very likely that reducing child poverty would bring significant benefits at the national and individual levels, such as increased life expectancy and the well-being of children later in life, higher income tax revenues (through higher employment rates), and lower welfare budget requirements.