Families in the U.S. are making gains in education and health, data also suggests the economy is rebounding from the recession although many are still in poverty.
Still, the latest findings on the state of U.S. children and their parents by the Annie E. Casey Foundation found many families continue to struggle with poverty amid a lack of steady, full-time work and affordable housing.
Nationwide, 16.4 million children, or 23 percent, were in families living in poverty in 2011, an increase from 15.7 million, or 22 percent, in 2010, and 3 million more than in 2005, the data showed.
"The negative impact of the recession remains evident," researchers at the non-profit youth advocacy organization wrote in their annual report, which focuses on children of all ages. The report is closely watched by federal and state policymakers.
Overall, dozens of states saw more youth improve in reading, math and graduation rates since 2005, a key indicator of future economic well-being, according to the report.
Most states also saw more children with health insurance, improvements in birth weights, and fewer youth deaths between 2005 and 2011, it said.
But signs also pointed to continued economic struggles.
Besides the increase in children in families living at or below the official U.S. poverty line, which was $22,811 in 2011, almost one-third of American youth, or nearly 23.8 million, were in families where no parent had full-time, year-round employment, data showed.
Additionally, about more than 29 million children lived in families that had to spend more than one-third of their income on housing in 2011 - about 2 million more than in 2005.
"The progress we're seeing in child health and education is encouraging, but the economic data clearly speak to the considerable challenges we still face," said Laura Speer, associate director for policy reform and data for the foundation.
Among specific U.S. states, New Hampshire, Vermont and Massachusetts topped the list for child well-being.
The lowest scoring states were Nevada, Mississippi and New Mexico. Mississippi, which consistently has ranked last in the 24-year history of the report, moved up to 49th in part because of gains in the number of children attending pre-school and more parents with high school diplomas.
The foundation for the first time gave data on multiracial children, a growing demographic in the United States.
While data showed "deep disparities" in health, education and economic well-being for specific racial minorities such as blacks, Latinos and Native Americans compared to more well-off Asians and whites, "multiracial kids are generally faring better than or as well as the overall population," researchers said.
The foundation also looked specifically at children between the ages of 3 and 4, the key focus of President Barack Obama's push to expand access to pre-school programs through a proposed federal-state partnership funded by increased tobacco taxes.
More than half of eligible children, or about 4.3 million, were not enrolled in a pre-school program between 2009 and 2011, although 44 states and Washington, D.C., saw improved enrollment, the report found.