Media Release | August 29, 2013
A new report released this week in Science journal directs us to change our thinking. Going forward, it means that anti-poverty programs could have a huge benefit that we’ve never recognized before: Help people become more financially stable, and you also free up their cognitive resources to succeed in all kinds of other ways as well.
For all the value in this finding, it’s easy to imagine how proponents of hackneyed arguments about poverty might twist the fundamental relationship between cause-and-effect here. If living in poverty is the equivalent of losing 13 points in IQ, doesn’t that mean people with lower IQs wind up in poverty?
“We’ve definitely worried about that,” Shafir says. Science, though, is coalescing around the opposite explanation. “All the data shows it isn’t about poor people, it’s about people who happen to be in poverty. All the data suggests it is not the person, it’s the context they’re inhabiting.”
Poverty consumes so much mental energy that those in poor circumstances have little remaining brainpower to concentrate on other areas of life, new research finds. As a result, those with few resources are more likely to make bad decisions that perpetuate their financial woes.
Published in the journal Science, the study suggests our cognitive abilities can be diminished by the exhausting effort of tasks like scrounging to pay bills. As a result, less “mental bandwidth” remains for education, training, time-management, and other steps that could help break out of the cycles of poverty.
UBC Prof. Jiaying Zhao
“Previous accounts of poverty have blamed the poor for their personal failings, or an environment that is not conducive to success,” said lead author Jiaying Zhao, a University of British Columbia professor who conducted the study as a graduate student at Princeton University. “We’re arguing that being poor can impair cognitive functioning, which hinders individuals’ ability to make good decisions and can cause further poverty.”
In one set of experiments, the researchers found that pressing financial concerns had an immediate negative impact on the ability of low-income individuals to perform on common cognitive and logic tests. On average, a person preoccupied with money problems exhibited a drop in cognitive function similar to a 13-point dip in IQ, or the loss of an entire night’s sleep.
In another series of field experiments, the researchers found that farmers show diminished cognitive performance before getting paid for their harvest, compared to after when they had greater wealth. These differences in cognitive functioning could not be explained by differences in nutrition, physical exertion, time availability or stress. According to the study, the mental strain of poverty differs from stress, which can actually enhance a person’s functioning in certain situations.
Background
Zhao’s study co-authors include Eldar Shafir (Princeton University), Sendhil Mullainathan (Harvard University) and Anandi Mani (University of Warwick). The paper, “Poverty impedes cognitive function,” was published online Aug. 29 by Science and is available upon request.
According to Shafir, the fallout of neglecting other areas of life may loom larger for a person just scraping by. Late fees tacked on to a forgotten rent, a job lost because of poor time-management — these make an already-tight money situation worse. And as people get poorer, they tend to make desperate decisions, such as excessive borrowing, that further perpetuate their hardship, he says.
The researchers suggest that services for the poor should better accommodate the strain that poverty places on a person’s mind. Such measures would include simpler aid forms and more guidance to receiving assistance, or training and educational programs structured so that missed classes aren’t as detrimental.
“When [people living in poverty] make mistakes, the outcomes of errors are more dear,” says Shafir. “So, if you are poor, you’re more error prone and errors cost you more dearly — it’s hard to find a way out.”
Jiaying Zhao is UBC’s Canada Research Chair in Behavioural Sustainability and a professor in the Dept. of Psychology and Institute of Resources, Environment and Sustainability.