A study of children subject to a care order across five local authority areas tracked how their outcomes changed over a number of years.
It found that in 71 per cent of cases, being taken into care improved the child's life chances after four to five years, while a fifth (19 per cent) experienced a mixture of improvement on some measures and deterioration on others, and 10 per cent had overall negative outcomes.
Measures used for the study included assessing the home life, relationships, education, health and behaviour of young people.
The young person's home life was described as "stable and happy" in 84 per cent of cases. In terms of education, almost two thirds (62.5 per cent) were in full-time education, employment or training.
Meanwhile, more than half (56 per cent) were considered to be able to mix well with their peers and adults, while 36 per cent were considered able to mix "partially well".
In most cases (85 per cent) children were found to have good physical health, with just four per cent deemed to be physically unhealthy.
Among children old enough to be prosecuted, 88 per cent were not known to be involved in offending.
A key factor in the good outcomes of those taken into care is the quality of support offered by their carers, or adopted family, the study found.
Key characteristics among good carers and adoptive families include offering stability, being nurturing and actively supporting their education and health needs. They also ensure the child feels part of a family.
"Other than for children placed for adoption, the key factor associated with positive outcomes was the quality of care in the foster, kinship or residential placement," states the research, which involved children placed in care in Wales in 2012/13.
"Positive outcomes placements were characterised by having carers who are: stable; warm and nurturing; committed (to this child's particular needs in the long term); pro-active in support of the child's educational, social and health and wellbeing needs; and inclusive of the child within the broader family (treating the child as a child of the family)."
Among the 79 children involved in the detailed study, 24 were in long-term foster care, 16 were adopted, two were in residential care and 14 were in long-term kinship care arrangements.
However, the study found that less than half (47 per cent) of children are considered to be in good emotional health with 21 per cent considered to be emotionally unhealthy or unstable four to five years after being taken into care.