The Cycle Of Poverty Is Psychological, Not Just Financial

Being poor makes you stressed, which prevents you from thinking long term.

When thinking about those who are less fortunate, it’s often said that you should put yourself in someone else’s shoes.

But research suggests that could be difficult, because being poor affects not only a person’s circumstances and environment, but also, more fundamentally, the way they think and make decisions. In a new review paper in the journal Science, part of a special issue on the “science of inequality,” two researchers detail the psychological cycle created by living in poverty that make it even more difficult to leave.

“A growing body of literature now shows that poverty makes people more stressed,” says Johannes Haushofer, a researcher at MIT’s Poverty Action Lab. “Stress makes people risk-averse, and it makes them more short-sighted, in the sense that they are more likely to make decisions that benefit them sooner than in the long term. That may put a limit on how much you are willing to invest in the future, in terms of health care, education, and so on.”

Haushofer and his colleague, Ernst Fehr at the University of Zurich, review a long list of studies that reveal how this relationship between stress and decision-making affects the poor. Together, the relationship creates a feedback loop that perpetuates the cycle of poverty: Psychologically, not just financially, poor people have trouble taking longer-term risks and investing in their future, and therefore stay poor and more stressed.

To Haushofer, what’s most surprising is not the evidence itself, but how much the evidence contradicts public perceptions about poverty. Many people think the poor are happy living simple and worry-free lives. “That’s just wrong. The data doesn’t bear that out at all,” says Haushofer. Similarly, people often reflexively blame the poor for making bad decisions, but don’t have empathy for their psychological challenges. In reality, the situation of poverty itself wields “enormous power” over the decisions people make, he notes.

While the researchers don’t have answers, they do call for more attention to be paid to improving the stress levels and psychological welfare of the poor as a strategy to tackle poverty itself. “If this feedback loops between poverty, stress, and decision-making exists, then the next thing we want to do obviously is to break it.”

[Image: Abstract via Shutterstock]

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  • Ms. Leber fails to mention the researchers primary suggestion for breaking the cycle and improving wellbeing: "target poverty directly." No amount of psychotherapy will ever have an impact on the causes of poverty only the symptoms. Even if we could train the army of counselors and psychologists needed for this type of intervention. "No disorder afflicting human kind has ever been eliminated or brought under control by treating the affected individuals" (Harvard epidemiologist John Gordon).

  • Oliver McCloud

    While this is true, the real problem of poverty is fed by life experience. If you have the experience of being poor, that is most likely what you will continue to do. Sure, some people break out, but as a general rule, poverty begets poverty. I know. I've been poor my entire life. I've lived in my car multiple times, stayed at shelters, slept under bridges. The plight of a poor person is not "I must reduce my level of stress so that I can function to save money and get myself out of here." No. It is "I have no idea what to do." The reason? Because they ( I ) have no experience not being poor.

    Remember that the brain is simply a network of neural pathways created by what? Experience. Change a person's experience, and you change the person, eventually. I blog about this stuff often. http://endingaimlessness.com if you are curious.

  • Kara Bismarck Thurbush

    I have been on both sides of the equation. I came from a middle-class family and was told I could do anything. I worked hard and learned how to do what I love by staying many hours at work on my own time studying graphic arts programs and reading everything I could about design. One of my best techniques was to read about poor design, and how it was defined, so I did not make the same mistakes. Unfortunately, a physical injury makes it impossible for me to sit (I am currently typing this message in bed) or stand for any length of time, so I lost the dream I caught. Now I can only think one day at a time, as my ability to support myself is no longer in my hands.

  • Kelly Vinson

    How freaking out of touch have the Elite "educated" among us become, that this is Surprising? You really had to study to find out people who are poor are really not happy and carefree? SMH.

  • It's like the root cause of major "problems" i.e. theft/violence/fraud/prostitution etc, that happens long since Aristotle, and continue the same today as before, but all we did is make laws against/around it, marginalizing those "guilty" for it, and basicaly making the problem worse & by media spreading the word to other people, so the ideea spreads like a virus. The ideea I heard is not to fight it, but bring a solution, and for me it makes sense. I strongly believe that new platforms such as bitcoin/crowdsourcing can help us make a more organised & balanced species. Cheers to that dub2sauce[at]gmail[dot]com

  • Lauren Stygar

    I must contest this article. I'm a very affluent woman. I only know westernized cost of living. I was my significant self and explained how I was not born rich. I had an illness to my eyes. I would need to get to the GED and an on-line degree to end my povery. I was never helped. The counselor system is too isolated and I've seen them not know how to take care of normal manners to engage on the adult level where there is gainful. They plotted defeatest extreams. I was put in a slum and my complaints were delibrately not taken care of to expose that such a thing could be done. I plan to get assistance to make financial security. I've a journal of a-moral negative defeatism at the in-take desks of every program I've been trapped to. My concerns for my loss of life are with Senator Dick Durbin