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Poverty may tax thinking abilities

But sudden windfalls improve poor people's mental fortunes

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Poverty drains brains while it empties pocketbooks, a new study concludes.

Money worries consume poor people’s attention, dramatically undermining their performance on IQ-related tests of reasoning and mental control, say economist Anandi Mani of the University of Warwick in Coventry, England, and her colleagues. Among the poor, but not the rich, evoking financial concerns damages reasoning abilities about as much as going a night without sleep or losing 13 IQ points, Mani’s team reports in the Aug. 30 Science.

Shortly after reaping a financial windfall, poor individuals perform far better on the same mental tests. That improvement may be thanks partly to temporary freedom from money concerns, the scientists propose.

Their findings follow evidence that scarcity of money (or anything else important) promotes short-term thinking, helping to explain why poor people generally save too little and borrow too much (SN: 12/1/12, p. 17).

The new study raises a valid concern, although people barely scraping by frequently deal with money in sophisticated ways, says Harvard University sociologist Kathryn Edin, who studies U.S. families subsisting on welfare. “Poverty can lead to better, not just worse, mental functioning.”

Many mothers on welfare, for instance, work out complicated family budgets and keep careful spending records, Edin finds.

In one experiment, Mani’s group classified more than 300 shoppers at a New Jersey mall as affluent or poor based on self-reported incomes and family size. Participants made easy or hard hypothetical financial decisions before taking nonverbal tests of logical thinking and the ability to control rapid responses to computer images.

Poor people who contemplated tough money problems scored lower on both mental tests than their wealthy counterparts. After easy problems, rich and poor groups scored similarly.

In a second experiment, the researchers administered comparable tests to 464 sugarcane farmers in India. Farmers eked out a living until harvests yielded big pay days.

The researchers gave tests before and after harvests; test scores rose substantially after harvests. Stress reduction, indicated by lower blood pressure and heart rate, partially explained farmers’ mental turnaround, Mani says.

Policymakers should consider reducing or simplifying decisions poor people have to make, perhaps by providing help in filling out tax and welfare forms or reminders about planning for the future, says study coauthor and Princeton University psychologist Eldar Shafir. “Impose less of a mental load on people struggling with having too little, and they’ll be better able to deal with other aspects of their lives.”

Further work needs to establish how much distracted minds, as opposed to cultural values and other factors, affect how poor people think, Edin says.

Editor's Note: This story was updated on September 11, 2013, to correct the numbers of people involved in the studies.

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