Poor Concentration: How Poverty Changes the Way You Think

  • Share
  • Read Later
Getty Images

One of the points I make in this week’s magazine story on American poverty is that being poor isn’t simply about not having enough income. Living on a slim financial margin often goes hand-in-hand with other destabilizing dynamics, such as shifting work schedules, paycheck amounts, transportation availability, and child-care arrangements. Relying on family members for babysitting or a colleague for a ride to work introduces a level of coordination—and likely stress—that richer people generally don’t have to deal with.

It’s hardly surprising that the stresses of poverty would take a psychological toll, but new research is showing just how stark a toll it can be. In one recent experiment, Princeton psychologists Eldar Shafir and Jiaying Zhao and Harvard economist Sendhil Mullainathan presented shoppers in a New Jersey mall with one of two scenarios about their car needing repairs. In the first situation, the cost was $150 and in the other $1,500. The researchers asked shoppers how they would make a decision about whether to get the car fixed or take a chance and hope that it lasted a while longer. While the shoppers mulled that over, they did a series of puzzles and other cognitive tests.

(PHOTOS: Portraits of Poverty)

The results: shoppers with above-average incomes did just as well on the tests whether they were faced with the $150 or $1,500 repairs, but those with below-average incomes did significantly worse when the repairs were going to cost $1,500 (as opposed to just $150). Even imaginary financial strain diminished the low-income group’s ability to think straight.

Addressing that dynamic—what we might call the distraction of poverty—is behind a number of new programs that try to help people regain focus, especially on long-term goals. Four years ago, New York City launched the U.S.’s first conditional cash transfer program, an approach that pays family members to do things like go to preventative doctors’ visits and earn a GED—goals that families generally have but often get sidetracked from pursuing because of the vagaries of low-income life. The San Francisco-based Family Independence Initiative similarly focuses attention by setting out a series of income- and stability-enhancing goals, and then having groups of low-income families gather to talk about strategies as they go after them.

(Video: The New Poor of Fresno)

Those two approaches target families, but Shafir and Mullainathan think there are also useful changes to make to systems. As they write in a chapter in the 2009 book Insufficient Funds, which is about financial services and the poor, middle-class people live in a world “composed of consultants, reminders, cooperative employers, ‘no-fee’ options, incentive awards, and automatic deposit.” If low-wage workers had jobs that came with auto-enroll 401(k)s, the thinking goes, maybe saving for retirement wouldn’t be such a stretch for them, either.

Ironically, some of the systems most in need of reform could be those specifically designed for the poor. In a 2004 paper, Mullainathan and Shafir, along with Chicago economist Marianne Bertrand, write about the dozens of pages of forms people in some states have to fill out in order to receive food stamps. Such “hassle factors,” as the authors call them, might prove particularly discouraging for the poor, who are already stretched so thin attention-wise. One approach to poverty alleviation might start not with increasing income, but with making other aspects of life easier.

This is a guest post by former TIME staff writer Barbara Kiviat. Kiviat has a story in this week’s TIME magazine on poverty.