Study: Poverty Contributes to Poor Concentration, Extends Financial Woes

Mental energy spent on poverty-related concerns can negatively affect a person's cognitive functioning.

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Though poverty is frequently blamed on personal failings or a series of unlucky events, a group of researchers at Princeton University is arguing that financial pressures can actually impair the way people's brains function, leading them to make poor decisions that initiate and perpetuate poverty.

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In their study, published Thursday online in the journal Science, the team argues that poverty consumes so much mental energy that those in poor financial situations have little brainpower left to concentrate on other aspects of life and are more likely to make bad decisions that add to their financial struggles.

"We're arguing that the lack of financial resources itself can lead to impaired cognitive functioning," said Jiaying Zhao, who conducted the study as a doctoral student at Princeton University. "The very condition of not having enough can actually be a cause of poverty."

In 2011, 9.5 million families were living in poverty, according to the U.S. Census Bureau. In the same year, 15.9 percent of the U.S. population (48.5 million people) had an income below the poverty level, which was an increase from 15.3 percent in 2010. As of 2012, a family of four with an annual income of less than $23,497 is considered to be living in poverty.

In a series of experiments, the team found that pressing financial concerns had an immediate impact on the ability of poor individuals to perform cognitive and logic tests. The average decline in cognitive function the researchers observed resembled the type of struggle a person would have after losing an entire night's sleep, or a 13-point drop in IQ.

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But when their concerns were less pressing, low-income individuals performed at a similar level to those with higher earnings.

"These pressures create a salient concern in the mind and draw mental resources to the problem itself," Zhao said in a statement. "That means we are unable to focus on other things in life that need our attention."

The team's findings support the idea that neglecting other areas of life may have more of a dire impact for a person with significant financial pressures.

A person can accrue late fees for not paying rent on time, or risk losing a job due to poor time management. And as a person becomes poorer, that individual may make more frantic decisions, such as borrowing excessively.

"When [people living in poverty] make mistakes, the outcomes of errors are more dear," said co-author Eldar Shafir, in a statement. "So, if you are poor, you're more error prone and errors cost you more dearly – it's hard to find a way out."

[OPINION: The Poverty Connection]

The team also found that the mental energy spent on poverty-related concerns is independent from stress, and that the declines in brainpower could not be explained by differences in nutrition, physical exertion or time availability. In fact, research has shown that some amounts of stress can actually enhance a person's cognitive functioning.

"A person in poverty might be at the high part of the performance curve when it comes to a specific task and, in fact, we show that they do well on the problem at hand. But they don't have leftover bandwidth to devote to other tasks," Shafir said. "The poor are often highly effective at focusing on and dealing with pressing problems. It's the other tasks where they perform poorly."

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