How Poverty Taxes the Brain

Scientists have discovered that being poor actually impairs our cognitive abilities.







This explains, for example, why poor people who aren’t good with money might also struggle to be good parents. The two problems aren’t unconnected.

“It’s the same bandwidth,” says Princeton’s Eldar Shafir, one of the authors of the study alongside Anandi Mani, Sendhil Mullainathan, and Jiaying Zhao. Poor people live in a constant state of scarcity (in this case, scarce mental bandwidth), a debilitating environment that Shafir and Mullainathan describe in a book to be published next week, Scarcity: Why having too little means so much.

What Shafir and his colleagues have identified is not exactly stress. Rather, poverty imposes something else on people that impedes them even when biological markers of stress (like elevated heart rates and blood pressure) aren’t present. Stress can also positively affect us in small quantities. An athlete under stress, for example, may actually perform better. Stress follows a kind of classic curve: a little bit can help, but beyond a certain point, too much of it will harm us.

This picture of cognitive bandwidth looks different. To study it, the researchers performed two sets of experiments. In the first, about 400 randomly chosen people in a New Jersey mall were asked how they would respond to a scenario where their car required either $150 or $1,500 in repairs. Would they pay for the work in full, take out of a loan, or put off the repair? How would they make that decision? The subjects varied in annual income from $20,000 to $70,000.


“And these are not people in abject poverty,” Shafir says. “These are regular folks going to the mall that day.”


The design of these experiments wasn’t particularly groundbreaking, which makes it all the more astounding that we’ve never previously understood this connection between cognition and poverty.



“When we do that, we liberate some bandwidth,” Shafir says. Policymakers tend to evaluate the success of financial programs aimed at the poor by measuring how they do financially. “The interesting thing about this perspective is that it says if I make your financial life easier, if I give you more bandwidth, what I really ought to look at is how you’re doing in your life. You might be doing better parenting. You might be adhering to your medication better.”



At the macro level, this means we lost an enormous amount of cognitive ability during the recession. Millions of people had less bandwidth to give to their children, or to remember to take their medication.

Conversely, going forward, this also means that anti-poverty programs could have a huge benefit that we’ve never recognized before: Help people become more financially stable, and you also free up their cognitive resources to succeed in all kinds of other ways as well.

For all the value in this finding, it’s easy to imagine how proponents ofhackneyed arguments about poverty might twist the fundamental relationship between cause-and-effect here. If living in poverty is the equivalent of losing 13 points in IQ, doesn’t that mean people with lower IQs wind up in poverty?

“We’ve definitely worried about that,” Shafir says. Science, though, is coalescing around the opposite explanation. “All the data shows it isn’t about poor people, it’s about people who happen to be in poverty. All the data suggests it is not the person, it’s the context they’re inhabiting.”

Top image: Jezper/