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The challenges of being poor like scrounging for rent and devising new ways to cut back on spending vacuums up large amounts of mental energy.
New research from Princeton University shows that the mental demands from not having a cushy bank account can suppress cognitive functioning by 13 IQ points, the equivalent of a full night's sleep potentially leading to bad decisions that keep the cycle of poverty spinning along.
For the first experiment, which took place at a mall in New Jersey, researchers looked at 400 random subjects with a median annual income of $70,000, the poorest of which made about $20,000. The subjects were asked to think about different financial scenarios, like having to pay $1,500 for a car repair, while at the same time performing common cognitive tasks.
Researchers found that under low-pressure financial scenarios, poor and rich folks performed equally well on the cognitive tasks. Under higher-pressure financial scenarios, however, those with the smallest pay checks performed significantly worse than their unfazed, wealthier counterparts.
The second test examined the cognitive function of farmers in India before and after a lucrative harvest. After controlling for nutrition, work effort, and time available, researchers found that the farmers showed lower cognitive ability before harvests than after, when they had a lot more dough.
These findings build on past research showing the hidden challenges of being poor. A 1993 study from the University of Michigan, for example, showed that children living in poverty tend to have lower IQs regardless of their parents' IQ or marital status. And more recent research shows that early life stresses associated with poverty can impact health and cognitive function throughout a person's life.
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, [author Eldar] 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
"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 [co-author Jiaying] Zhao, who is now an assistant professor of psychology at the University of British Columbia. [Princeton]
It's easy to see how depleted mental functioning might make it tough to climb out of poverty. From Matthew Yglesias at Slate:Poor people like all people make some bad choices. There is some evidence that poor people make more of these bad choices than the average person. This evidence can easily lead to the blithe conclusion that bad choices, rather than economic conditions, are the cause of poverty. The new research shows that this is at least to some extent exactly backward. It's poverty itself (perhaps mediated by the unusually severe forms of decision fatigue than can affect the poor) that undermines judgment and leads to poor decision-making.