Breaking the Cycle: Rethinking Poverty Persistence and Policy Solutions in Australia

Abstract

Using longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, this study examines the extent, incidence and drivers of persistent poverty. Results show that poverty is, in many cases, not a temporary condition. Women, single-parent families, Indigenous Australians, older individuals, people with long-term disabilities and residents of disadvantaged regions are disproportionately affected by persistent poverty. Major triggers for poverty entry include a decline in household labour earnings and household composition changes, such as transitioning to a single-parent family. We also find that individuals in deep poverty face the highest likelihood of remaining poor over the long term. Our analysis demonstrates the limitations of a one-size-fits-all labour market-focused approach to poverty reduction. Many persistently poor individuals face structural barriers to employment, such as caregiving responsibilities, health conditions, or age-related constraints. Effective poverty alleviation strategies therefore need to incorporate broader social policy interventions, including increased income support adequacy, access to affordable child care and policies aimed at reducing poverty re-entry rates.