But while the number of children in poverty in workless homes fell by 100,000 between 2007/8 and 2008/9 there was no change in the figures for those in working households.
The IPPR says that in recent years many employers have opted for pay freezes and reduced hours to combat recession.
Its study, In-work Poverty and the Recession, says that a key feature of the economic recession has been the absence of compulsory mass lay-offs. The IPPR urges the government to ensure that its welfare reforms do more to tackle low pay and help parents to work.
IPPR director Nick Pearce said: "While unemployment increased by less than expected in the recession, these figures clearly show that being in work is no guarantee of being out of poverty."
Other findings in the study were that six out of 10 working poor families have children.
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