- Poverty and all its related concerns require so much mental energy that
the poor have less remaining brainpower to devote to other areas of life.
The researchers suggest that being poor may keep a person from
concentrating on the very avenues that would lead them out of poverty. A
person's cognitive function is diminished by the constant and
all-consuming effort of coping with the immediate effects of having
little money, such as scrounging to pay bills and cut costs. Thusly, a
person is left with fewer "mental resources" to focus on complicated,
indirectly related matters such as education, job training and even
managing their time.
In a series of experiments, the researchers found that pressing
financial concerns had an immediate 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.
But when their concerns were benign, low-income individuals performed
competently, at a similar level to people who were well off, said
corresponding author Jiaying Zhao, who conducted the study as a doctoral
student in the lab of co-author Eldar Shafir, Princeton's William
Stewart Tod Professor of Psychology and Public Affairs. Zhao and Shafir
worked with Anandi Mani, an associate professor of economics at the
University of Warwick in Britain, and Sendhil Mullainathan, a Harvard
University economics professor.
"These pressures create a salient concern in the mind and draw mental
resources to the problem itself. That means we are unable to focus on
other things in life that need our attention," said Zhao, who is now an
assistant professor of psychology at the University of British Columbia.
"Previous views of poverty have blamed poverty on personal failings,
or an environment that is not conducive to success," she said. "We're
arguing that the lack of financial resources itself can lead to impaired
cognitive function. The very condition of not having enough can
actually be a cause of poverty."
The mental tax that poverty can put on the brain is distinct from
stress, Shafir explained. Stress is a person's response to various
outside pressures that -- according to studies of arousal and
performance -- can actually enhance a person's functioning, he said. In
the
Science study, Shafir and his colleagues instead describe
an immediate rather than chronic preoccupation with limited resources
that can be a detriment to unrelated yet still important tasks.
"Stress itself doesn't predict that people can't perform well -- they
may do better up to a point," Shafir said. "A person in poverty might
be at the high part of the performance curve when it comes to a specific
task and, in fact, we show that they do well on the problem at hand.
But they don't have leftover bandwidth to devote to other tasks. The
poor are often highly effective at focusing on and dealing with pressing
problems. It's the other tasks where they perform poorly."
The fallout of neglecting other areas of life may loom larger for a
person just scraping by, Shafir said. Late fees tacked on to a forgotten
rent payment, a job lost because of poor time-management -- these make a
tight money situation worse. And as people get poorer, they tend to
make difficult and often costly decisions that further perpetuate their
hardship, Shafir said. He and Mullainathan were co-authors on a 2012
Science
paper that reported a higher likelihood of poor people to engage in
behaviors that reinforce the conditions of poverty, such as excessive
borrowing.
"They can make the same mistakes, but the outcomes of errors are more
dear," Shafir said. "So, if you live in poverty, you're more error
prone and errors cost you more dearly -- it's hard to find a way out."
The first set of experiments took place in a New Jersey mall between
2010 and 2011 with roughly 400 subjects chosen at random. Their median
annual income was around $70,000 and the lowest income was around
$20,000. The researchers created scenarios wherein subjects had to
ponder how they would solve financial problems, for example, whether
they would handle a sudden car repair by paying in full, borrowing money
or putting the repairs off. Participants were assigned either an "easy"
or "hard" scenario in which the cost was low or high -- such as $150 or
$1,500 for the car repair. While participants pondered these scenarios,
they performed common fluid-intelligence and cognition tests.
Subjects were divided into a "poor" group and a "rich" group based on
their income. The study showed that when the scenarios were easy -- the
financial problems not too severe -- the poor and rich performed
equally well on the cognitive tests. But when they thought about the
hard scenarios, people at the lower end of the income scale performed
significantly worse on both cognitive tests, while the rich participants
were unfazed.
To better gauge the influence of poverty in natural contexts, between
2010 and 2011 the researchers also tested 464 sugarcane farmers in
India who rely on the annual harvest for at least 60 percent of their
income. Because sugarcane harvests occur once a year, these are farmers
who find themselves rich after harvest and poor before it. Each farmer
was given the same tests before and after the harvest, and performed
better on both tests post-harvest compared to pre-harvest.
The cognitive effect of poverty the researchers found relates to the
more general influence of "scarcity" on cognition, which is the larger
focus of Shafir's research group. Scarcity in this case relates to any
deficit -- be it in money, time, social ties or even calories -- that
people experience in trying to meet their needs. Scarcity consumes
"mental bandwidth" that would otherwise go to other concerns in life,
Zhao said.
"These findings fit in with our story of how scarcity captures
attention. It consumes your mental bandwidth," Zhao said. "Just asking a
poor person to think about hypothetical financial problems reduces
mental bandwidth. This is an acute, immediate impact, and has
implications for scarcity of resources of any kind."
"We documented similar effects among people who are not otherwise
poor, but on whom we imposed scarce resources," Shafir added. "It's not
about being a poor person -- it's about living in poverty."
Many types of scarcity are temporary and often discretionary, said
Shafir, who is co-author with Mullainathan of the book, "Scarcity: Why
Having Too Little Means So Much," to be published in September. For
instance, a person pressed for time can reschedule appointments, cancel
something or even decide to take on less.
"When you're poor you can't say, 'I've had enough, I'm not going to
be poor anymore.' Or, 'Forget it, I just won't give my kids dinner, or
pay rent this month.' Poverty imposes a much stronger load that's not
optional and in very many cases is long lasting," Shafir said. "It's not
a choice you're making -- you're just reduced to few options. This is
not something you see with many other types of scarcity."
The researchers suggest that services for the poor should accommodate
the dominance that poverty has on a person's time and thinking. Such
steps would include simpler aid forms and more guidance in receiving
assistance, or training and educational programs structured to be more
forgiving of unexpected absences, so that a person who has stumbled can
more easily try again.
"You want to design a context that is more scarcity proof," said
Shafir, noting that better-off people have access to regular support in
their daily lives, be it a computer reminder, a personal assistant, a
housecleaner or a babysitter.
"There's very little you can do with time to get more money, but a
lot you can do with money to get more time," Shafir said. "The poor, who
our research suggests are bound to make more mistakes and pay more
dearly for errors, inhabit contexts often not designed to help
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