Business, Economics and Jobs

Poverty can reduce brainpower, study finds


An unemployed man in central Athens holds a cardboard sign saying "I'm hungry" next to a coffee shop. The government classifies some 3.4 million as living in poverty out of a population of 11 million.


Milos Bicanski

A new study by a team of international researchers has found that the complications of poverty aren't just stressful: they can actually reduce the brainpower of the disadvantaged, leading them to make worse decisions than they might otherwise. 

Worry induced by financial problems can cause as much as a 13-digit dip in IQ points, the researchers found: as much damage as is done by missing an entire night of sleep. 

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Researchers talked to both New Jersey shoppers and Indian sugar cane farmers to collect their results, gathered by questioning people on matters that would remind them of their financial situation, while at the same time considering hypothetical budget decisions that were divided into "easy" and "hard" levels, writes Scientific American. 

After the questioning, the subjects were asked to perform some basic tasks that tested their cognitive ability, or their "mental bandwidth" as the study authors have termed it. 

The results were surprising: poorer people did worse than the rich on cognitive tasks when they had been given "hard" financial decisions to contemplate. (The results were similar when the financial decisions were "easy".) 

Shifting to Indian sugar cane farmers, the researchers found their study subjects performed better on cognitive tests after they had been paid, perhaps as a result of their now-reduced financial stress. 

"These findings fit in with our story of how scarcity captures attention. It consumes your mental bandwidth," said corresponding author Jiaying Zhao in a Princeton press release. "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."

"The poor are often highly effective at focusing on and dealing with pressing problems," said Princeton researcher Eldar Shafir to Reuters of the study. "But they don't have leftover bandwidth to devote to other tasks. 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."

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