The Impacts of Child Poverty

Written by Keryn O’Neill, MA, PGCertEdPsych, Knowledge Manager

The way we live as children strongly influences not only our early health and development, but also our long-term outcomes – things like our adult health, employment, and relationships.¹ Living in poverty can have profound and long-term effects not only for children and their families but also for wider society.²

This article looks at what child poverty is, the way some groups can be more affected than others, the multiple ways in which poverty can impact child development, and the broader social consequences. Finally, we consider some policy solutions. Child poverty is not inevitable, and it can be alleviated through systemic changes.

Child poverty in Aotearoa

Despite the Child Poverty Act (2018), Aotearoa New Zealand has a poor record of child poverty compared to many other countries.

• In the 2022/2023 financial year:
  — about 12.5% of children were living in material hardship – around 143,700 children.³ This is higher than the median for EU nations of 9%.⁴
  — approximately 5.5%, or 63,600 were living in severe material hardship.⁵
• NZ ranks 29^th out of 39 OECD countries, with a 21.1% rate of child poverty (drawing on 2019-2021 data).⁶
• Our child poverty rates have increased greatly over recent decades. For example, during the years 1982-1990, 10 -15% of New Zealand children were living in poverty, by 2015 this had risen to 28%.⁷ Despite decreases from 2018 to 2022, child poverty rates have been increasing significantly in the last few years.⁸

Longitudinal data from Growing Up in New Zealand (GUiNZ) provide insights into patterns of poverty exposure for NZ children.

• For children who experienced hardship, this typically began in the first few years of their lives, prior to school age.⁹
• By 8 years-old, children in the GUiNZ cohort were twice as likely to experience falling into poverty than they were to climb out of it.¹⁰
• Approximately one in ten New Zealand children face multiple disadvantages, such as very low family income, material hardship and unstable housing, through much of their early and middle childhood.¹¹
• By 12 years of age, 10% were facing material hardship, and 20% had experienced material hardship at some point in childhood.¹²

What is child poverty?

There are two main ways of measuring poverty – as an absolute amount e.g. $x/ day, or relative to a percentage of the median income of that country. Further, it can be difficult to define and compare poverty across different countries and communities. This is because poverty can be defined both as a lack of resources (e.g. household income), or by the effects of poverty (e.g. hardship).¹³

One definition of poverty is “exclusion from the minimum acceptable way of life in one’s own society because of lack of resources.”¹⁴ In terms of child poverty, it means children not having enough money or material resources (e.g. food, suitable housing) to help them develop and thrive.¹⁵ Household income and other non-income measures are connected to each other. Both are important.¹⁶

Material hardship can be assessed through examining the daily living conditions of a family. It usually includes seventeen basics such as food, heating, clothing, and the ability to pay for utilities or medical care – daily realities that measuring income alone might miss.¹⁷ A family lacking six or more of these basics, due to cost, constitutes material hardship. Children going without nine or more are in severe material hardship.¹⁸

In relatively well-off countries, such as Aotearoa New Zealand, poverty is typically assessed using a relative measure: a percentage of the median household income.¹⁹ Stats NZ use children living in families with less than 50% of the median income. This is adjusted to account for families with differing numbers and ages of members.²⁰ Some countries, like the UK, use a measure of less than 60% of median income.²¹

NZ’s Child Poverty Reduction Act (2018) includes both income-based measures, and material hardship measures.²²

Effects of child poverty

Two of the main effects of poverty that have been studied, and which impact children, are food insecurity and housing instability.

1. Food insecurity

Food insecurity is defined in Aotearoa New Zealand as “a limited or uncertain availability of nutritionally adequate and safe foods, or limited ability to acquire personally acceptable foods that meet cultural needs in a socially acceptable way.”²³ This highlights the importance of both the quantity and the quality of food.

Food insecurity increases a child’s risk of poor health and wellbeing outcomes. For example:

• There can be a profound impact on educational outcomes. Children who experience food insecurity can be up to four years behind their food-secure peers, even after adjusting for socioeconomic factors.²⁴
• These impacts begin before birth. NZ’s longitudinal Pacific Islands Families (PIF) study found pre-natal food security was associated with higher secondary school academic achievement.²⁵
• In adolescence, food insecurity increases the risk of becoming overweight, having mental health challenges, and being truant.²⁶
• Among 25 OECD countries with data on food poverty in a study on academic achievement, Aotearoa had the second highest rate of students who had missed meals because there was not enough money for food.
  — The OECD average for children who had missed a meal at least once a week in the last 30 days due to lack of money is just over 8%.
  — NZ’s rate of just over 14% is similar to rates in Chile and Colombia.²⁷

2. Housing instability

Secure housing provides stability and support for children and young people.²⁸ Yet many NZ children experience poor quality or insecure housing. The Growing Up in NZ study has found that²⁹ for 12-year-old children:

• Ten percent of children had moved house three or more times since they were 8 years old.
• Children living in public housing were more likely to experience frequent moves.
• Around 25% lived in homes with minor issues with dampness or mould, with 4% experiencing major problems. Major problems were more common for children living in rental properties (public or private), in more deprived areas, and among those facing material hardship.
• Between the ages of 8 and 12, 7% had experienced homelessness at least once.³⁰

Inequity of child poverty in Aotearoa

Child poverty is not distributed equally across Aotearoa New Zealand.³¹ Poverty is experienced across all ethnic groups, however, children from some groups are more likely to experience poverty than others. For example, Pākeha children are less likely to be living in low-income households than their peers of other ethnicities.³² Structural factors including colonisation, systemic racism, and ableism drive this unequal distribution.³³
 
Colonisation led to the alienation of approximately 95% of Māori land by 2017, fundamentally disrupting the economic and cultural base of whānau wellbeing. This dispossession severed the connection to land, diminishing collective capacity for essential economic functions – such as food production and housing stability – while restricting access to cultural systems that traditionally sustained community resilience.³⁴
 
However, historical alienation is not the sole driver of current disparities. Systemic racism and ongoing marginalisation are critical mechanisms that maintain inequity across the life course. Tamariki Māori are significantly more likely than Pākeha peers to experience persistent income poverty and housing instability before they even start school.³⁵ These disadvantages are compounded by racial discrimination, and institutional bias in health and social services creates cumulative barriers to opportunity.³⁶
 
Consequently, material hardship should be understood as an outcome of interconnected cultural dispossession and systemic disadvantage, which collectively disrupt whānau support structures and drive significant disparity.³⁷ Recent data shows that 23.9% of Māori children live in material hardship, are lacking daily essentials and face associated avoidable health impacts.³⁸
 
Inequities continue into the adolescent years. Youth19 findings show that Māori teens are approximately 2.5 times more likely than Pākeha teens to have financial worries at home and 3.5 times more likely to have housing instability.³⁹ These inequities contribute to inequities in outcomes. For example, while adolescent mental health distress has been increasing over the past decade, the inequities between Māori and Pākeha youth have also been increasing.⁴⁰
 
Children in sole-parent families are more likely to experience poverty than those in two-parent families, primarily due to structural and policy factors, such as family policy and minimum wages.⁴¹

Children with disabilities are significantly more likely to live in poverty.⁴² Similarly, families including a disabled person are more likely to be in hardship with NZ rates of material hardship for such families remaining consistently around 20% over the past five years.⁴³ This inequity also reflects structural factors including the availability and accessibility of appropriate supports.

Effects of child poverty

Poverty can impact many areas of child development, some of which are described below. These and other aspects of children’s lives and development overlap and influence each other in often complex ways.

1. Physical health

Children who experience poverty are more likely to have poorer health, and more serious health issues, than those not in poverty, and these differences increase into adolescence and adulthood.⁴⁴ Poverty is associated with increased rates of chronic disease, increased rates of injury and decreased access to health care.⁴⁵ Hospitalisation rates are three times higher for children living in low-income communities than those living in high-income communities.⁴⁶

Differences in health outcomes can be seen very early and can be tragic. Despite declining rates of SUDI (sudden unexpected death in infancy) in Aotearoa, infants living in the areas of highest deprivation are almost eight times more likely to die from SUDI than infants in areas with the lowest deprivation.⁴⁷

For children under the age of 15 years in Aotearoa, the mortality rate for those in areas of highest deprivation is more than three times higher the rate for children in areas of least deprivation.⁴⁸

2. Mental health

There is a “strong socioeconomic gradient in mental health” with the vulnerability to mental health issues increasing at lower income levels.⁴⁹ There are multiple reasons for this including greater exposure to stress and less access to resources.⁵⁰

Children living in poverty are three to four times more likely to experience mental health challenges such as stress, anxiety and depression than those whose families are not in poverty.⁵¹

These challenges impact young people as they go through adolescence.⁵² A large Swedish study found that childhood poverty was associated with an increased risk of drug issues in adulthood.⁵³ In Aotearoa, data from Youth19 found that heavy use of tobacco, alcohol and cannabis occurred more frequently among students in the most socio-economically deprived areas.⁵⁴ There are many complex reasons for these differences, which include the higher density of alcohol outlets in these areas.⁵⁵

The relationship between poverty and mental health is bi-directional. In other words, while poverty increases the likelihood of mental health issues, mental health challenges are also associated with an increased risk of poverty.⁵⁶ This can compound the issues and contribute to inter-generational cycles of poverty.⁵⁷

Poverty can also make it more difficult to access support for mental health when it is needed, due to fewer services and financial barriers in accessing these (e.g. transport).⁵⁸

3. Maltreatment

There is also a strong association between poverty and child maltreatment.⁵⁹ Children growing up in poverty are five times more likely to experience maltreatment compared to those from high-income households.⁶⁰ The risk of maltreatment increases with increasing levels of hardship in the children’s families.⁶¹

Although most children growing up in poverty do not experience maltreatment, their risk is greatly increased as parents are less likely to have the resources and support to effectively parent their children.

Maltreatment is associated with less positive outcomes for children across many domains. The cumulative impacts of poverty as well as maltreatment increase the likelihood of poorer outcomes, including poorer physical and mental health already described.

4. Brain development

A growing body of research has demonstrated that child poverty can affect brain development.⁶² The relationship between poverty and brain development, however, is complex and is also influenced by the other risk and protective factors that individual children experience.⁶³

The impact of poverty begins early and may have widespread effects on brain development before birth.⁶⁴ Social disadvantage experienced during pregnancy can affect the structure, function, and connectivity of the baby’s brain, which can be long-lasting.⁶⁵

The impacts of poverty on brain development can differ depending upon the child’s stage of development as certain brain regions are more sensitive at particular times.⁶⁶ For example, poverty in early childhood has been linked to smaller amygdala volumes, though this effect lessens in adolescence, but poverty is associated with reduced hippocampal volume regardless of age.⁶⁷

Child poverty influences brain development⁶⁸ in complex ways that are not yet fully understood. Some evidence indicates that poverty might speedup, or slow down, brain development depending upon age, and stage of development.⁶⁹ Other research suggests that poverty leads to different patterns of neurodevelopment beyond changes in speed.⁷⁰

5. Societal impacts

Child poverty has consequences far beyond the children and families directly affected. From an economic point of view, the costs are huge, including child maltreatment, crime and imprisonment, reduced earnings, and increased health issues.⁷¹

Children growing up in poverty are less likely to achieve academically and more likely to face serious physical and mental health issues. These outcomes impact not only the children themselves, but society generally, as they may be less able to contribute positively to their communities.⁷² As a result, child poverty is not only a personal hardship but a broader social and economic challenge that affects everyone.

Mechanisms underlying the effects of child poverty

Child poverty affects development through multiple inter-connected pathways. A number of overlapping theories explain the ways in which poverty can affect children’s development.⁷³ These include:

• Family and environmental stress perspective – chronic stress can impact children’s physiology and brain development, influencing their development in many areas including their ability to self-regulate.⁷⁴ Early self-regulation skills, or the lack of them, have been identified as a key mechanism by which poverty contributes to poor outcomes later in life.⁷⁵ In addition, the increased demands on parents in poverty may mean they are less able to invest as much time with their children.⁷⁶
• Resources and investment perspective – children whose families have sufficient resources are likely to experience more enriching early environments.⁷⁷ In contrast, children in poverty may have less access to the resources needed for healthy development like access to health care, stable housing, and sufficient food.
• Neuroscience perspective – provides insight into the differences in both the structure and function of the brain that are associated with family economic circumstances.⁷⁸

These approaches, drawing on different academic disciplines, are not mutually exclusive.⁷⁹ Collectively they highlight the complex interplay between poverty and child development.

Parenting

Children need nurturing by their parents to support their healthy growth and development. Poverty-related stress can affect parents’ emotions, how they behave, and their ability to care for and emotionally support their children.⁸⁰ When parents struggle to meet basic needs, their stress levels rise, making it harder for them to protect their children from adversity. Consequently, children are likely to experience greater emotional distress.⁸¹

Chronic stress due to poverty can negatively affect how parents care for their children and increase the risk of harsh parenting behaviour,⁸² which in turn increases the likelihood of children experiencing mental health challenges.⁸³

Supportive parenting can moderate the effects of disadvantage on child development, however only in families facing lower levels of disadvantage. There may be a threshold beyond which parenting is a less effective protective factor, indicating the importance of reducing disadvantage as a key prevention strategy.⁸⁴

When parents are tired and stressed from money worries it can be harder to provide the nurturing relationships their children need.⁸⁵

Individual differences

At the population level, exposure to poverty increases the likelihood of poor outcomes. However, at the individual level, the impacts on children, and the adults they become, vary significantly.⁸⁶ Children are not all affected by poverty in the same way.

Reasons for differing outcomes include:

• Variations in genetic susceptibility.⁸⁷
• The overall environment in which they grew up.⁸⁸
• Complex interactions between a child’s genes and their environment.⁸⁹
• How long children experience poverty, with greater negative impacts with longer exposure.⁹⁰
• The severity of exposure to poverty.⁹¹
• The developmental timing of exposure to poverty.⁹²

The presence of other risk factors and the availability of protective factors also explain why children are affected differently in what might appear to be similar circumstances.

Addressing poverty in Aotearoa New Zealand

Policy

Child poverty is a complex issue that is influenced by government policy.⁹³ In fact, structural and political factors play a greater role than individual factors.⁹⁴

The Welfare Expert Advisory Group reported that “New Zealand’s social security system is no longer fit for purpose.”⁹⁵ Tight targeting, sanctions, and low benefit levels result in many people unable to meet their basic needs.⁹⁶ This suggests fundamental systemic changes are needed.

There is evidence that removing structural barriers and providing effective supports would lead to significant benefits, across generations.⁹⁷ Countries with lower child poverty rates often have broader universal supports, such as child benefits or subsidised childcare, which reduce financial pressure on families.

For example, child poverty levels in the UK dropped to 19% in 2021 following a temporary increase in social spending but rose again to 22% in 2023 after the support was stopped.⁹⁸

In 2021, as part of the Rescue Plan during the COVID-19 pandemic, the US created the expanded child tax credit (eCTC) and child poverty rates were halved between 2020 to 2021 with the eCTC accounting for 90% of this reduction.⁹⁹ This was the largest recorded decrease in child poverty,¹⁰⁰ which increased in 2022 when the relief was withdrawn.¹⁰¹

Publicly funded Paid Family Leave (PFL) was studied in the US, with comparisons between PFL and non-PFL states, as well as prior to the introduction of PFL. In comparing reports of infant maltreatment (under 1 year old) these were reduced by 14% and child removals from their family reduced by 46% where PFL was available.¹⁰² This study adds to a body of research showing that policies that raise household income are associated with reductions in child maltreatment, with the greatest impact seen in early childhood.¹⁰³

Addressing poverty

While other interventions at times focus on specific health outcomes, increasing household incomes is likely to have broader positive effects, given that income is connected to so many different health outcomes.¹⁰⁴ Similarly, when families have sufficient resources to meet their needs the emotional wellbeing of children and their families improves.¹⁰⁵ Increasing income for low-income families is among the most immediately effective strategies for reducing child poverty and its impacts.¹⁰⁶

Research highlights supportive parenting can be a protective factor for children experiencing poverty¹⁰⁷ however “parents experiencing poverty are often under an enormous amount of stress…(and) parenting…should not be the only protective factor that is examined.”¹⁰⁸

It is important to note that a nation’s wealth does not necessarily correlate to child poverty levels. Countries with similar incomes per capita can have markedly different levels of child poverty. For example, the US and Denmark have similar income per capita, yet the US average child poverty rate is 26.2% compared with 9.9% in Denmark.¹⁰⁹ This means that efforts to reduce poverty that rely on increasing overall wealth are likely to fall short.

Conclusions

Poverty affects many New Zealand children, with higher rates of child poverty here than in most other OECD nations. On current policy settings, rates of poverty as well as inequitable distribution, are increasing. This means increasing numbers of children growing up without the basics to maximise the chances of a positive start to life.
 
Child poverty can have many short- and long-term impacts on children themselves – including physical and mental health, brain development, and the risk of experiencing maltreatment. These impacts can last across the lifespan, as well as influence future generations.
 
However, the effects of growing up in poverty are not limited to those directly impacted. The social and economic consequences of poverty and living in an inequitable society affect all of us.

Importantly, it does not have to be like this. Child poverty can be alleviated through structural and systemic changes. Addressing child poverty is both a moral and economic necessity.¹¹⁰

Endnotes

1. Grant et al., 2023
2. J. Smith, 2023
3. Child Poverty Action Group, 2024
4. Perry, 2024
5. Child Poverty Action Group, 2024
6. UNICEF Innocenti – Global Office of Research and Foresight, 2023
7. Simpson et al., 2016, cited by Gibson et al., 2017
8. Office of the Auditor-General, 2025
9. Grant et al., 2023
10. Prickett et al., 2022, cited by J. Smith, 2023
11. J. Smith, 2023
12. Grant et al., 2023
13. Boston & Chapple, 2014
14. Perry, 2013, cited by Boston & Chapple, 2014, p. 23
15. Boston & Chapple, 2014; Gibson et al., 2017
16. Gibson et al., 2017
17. Stats NZ: Tatauranga Aotearoa, 2024
18. Child Poverty Action Group, 2025
19. UNICEF Innocenti, 2025
20. Stats NZ: Tatauranga Aotearoa, 2024
21. McFadden & Phillipson, 2025
22. Ministry of Social Development
23. Parnell et al., and, Ministry of Health, 2019, cited by Gerritsen et al., 2023, p. 2
24. McKelvie-Sebileau & Swinburn, 2024
25. Iusitini, Tautolo, Plank, & Rush, 2023
26. Utter, Izumi, Denny, Fleming, & Clark, 2018
27. Schleicher, 2023, cited by McKelvie-Sebileau & Swinburn, 2024
28. H. Lai, Prickett, Renker-Darby, Paine, & Atatoa Carr, 2023
29. H. Lai et al., 2023
30. H. Lai et al., 2023
31. Child Poverty Action Group, 2025
32. Duncanson et al., 2021
33. J. Smith, 2023
34. Moeke-Pickering, 1996, cited by Thom, 2022; Rao, 2018, cited by Thom, 2022; Thom & Grimes, 2022
35. Clark et al., 2025; Grant et al., 2023
36. Reid, Cormack, & Paine, 2019
37. Moewaka Barnes & McCreanor, 2019; Pihama, Te Nana, Cameron, Southcombe, & Mataki, 2017
38. Grant et al., 2023; Office of the Auditor-General, 2025
39. Clark et al., 2025
40. Sutcliffe et al., 2023, and, Clark et al., 2022, cited by Clark et al., 2025
41. Burciu, 2025; Brady et al., 2017, cited by Nieuwenhuis, 2022
42. Wensley, 2023; Parish et al., 2008, cited by Boston & Chapple, 2014
43. Child Poverty Action Group, 2025
44. Bateson et al., 2004, cited by E. T. C. Lai et al., 2019; Pollak & Wolfe, 2020
45. Brumberg & Shah, 2015
46. Simpson et al., 2016, cited by Gibson et al., 2017
47. Duncanson et al., 2022
48. Duncanson et al., 2022
49. Marmot, 2012, cited by Simpson, Albani, Bell, Bambra, & Brown, 2021, p. 1
50. Visser et al., 2021, and, Hughes et al., 2020, cited by Clark et al., 2025
51. Kinge et al., 2021; Lipman & Boyle, 2008, cited by Gibson et al., 2017; Children’s Commissioner, 2024, cited by Skinner & Kennedy, 2024
52. E. T. C. Lai et al., 2019
53. Manhica, Straatmann, Lundin, Agardh, & Danielsson, 2020
54. Sullivan et al., 2025
55. Ministry of Health, 2015, cited by Alcohol Healthwatch, 2021
56. Reiss, 2013, cited by Gibson et al., 2017
57. Boden et al., 2013, cited by Gibson et al., 2017
58. Gibson et al., 2017
59. Skinner, Bywaters, & Kennedy, 2023
60. Sedlak et al., 2010, cited by Bullinger, Raissian, Klika, Merrick, & Thibodeau, 2025
61. Skinner et al., 2023
62. Herzberg & Smyser, 2024
63. Dufford, Kim, & Evans, 2020; Rakesh, Whittle, Sheridan, & McLaughlin, 2023
64. Mathan et al., 2024; Triplett et al., 2022
65. Dufford et al., 2020; Herzberg & Smyser, 2024
66. Dufford et al., 2020; Qiu et al., 2025
67. Qiu et al., 2025
68. Nelson, Sullivan, & Valdes, 2025; Rakesh et al., 2023, cited by Qiu et al., 2025
69. Nelson et al., 2025
70. Rakesh et al., 2023, cited by Qiu et al., 2025
71. Duncan & Magnuson, 2011, cited by Pollak & Wolfe, 2020
72. Pollak & Wolfe, 2020
73. Noble et al., 2021
74. Duncan, Magnuson, & Votruba-Drzal, 2017; Blair et al., 2011, and, Farah, 2017, cited by Williams & Howard, 2020
75. Blair & Raver, 2015, cited by Williams & Howard, 2020
76. Peverill et al., 2021
77. Becker, 2009, cited by Noble et al., 2021
78. Duncan et al., 2017
79. Duncan et al., 2017; Noble et al., 2021
80. Gibson et al., 2017; Johnson, Riis, & Noble, 2016
81. Masten, Lombardi, & Fisher, 2021
82. Blair & Raver, 2016; Conger at al., 2020, cited by Peverill et al., 2021
83. Conger at al., 2020, cited by Peverill et al., 2021
84. Leverett et al., 2025
85. Boston & Chapple, 2014; EAG on solutions to child poverty, 2012, cited by Duncanson et al., 2020
86. Johnson et al., 2016
87. Johnson et al., 2016
88. Johnson et al., 2016
89. Nelson et al., 2025; Shonkoff, Boyce, Levitt, Martinez, & McEwen, 2021
90. Cooper & Stewart, 2013
91. Lupien at al., 2009, cited by K. E. Smith & Pollak, 2020
92. Nelson et al., 2025; K. E. Smith & Pollak, 2020
93. McCabe et al., 2024
94. Bradshaw & Nieuwenhuis, 2021
95. J. Smith, 2023, p. 19
96. J. Smith, 2023
97. J. Smith, 2023
98. UK Government Department for Work and Pensions, 2024, and, Ray-Choudhuri et al., 2023, cited by McCabe et al., 2024
99. Curran, 2022, cited by Flynn, Kenyon, & Vasan, 2023
100. Joint Economic Committee Democratic, 2022, cited by UNICEF Innocenti, 2025
101. UNICEF Innocenti, 2025
102. Bullinger et al., 2025
103. Bullinger et al., 2025
104. E. T. C. Lai et al., 2019
105. Masten et al., 2021
106. UNICEF Innocenti – Global Office of Research and Foresight, 2023
107. Brody et al., 2019, cited by Dufford et al., 2020
108. Dufford et al., 2020, pp. 89-90
109. UNICEF Innocenti – Global Office of Research and Foresight, 2023
110. Skinner & Kennedy, 2024 

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