The Befuddling Effect of Poverty

The strain of worrying constantly about making ends meet depletes poor people’s brainpower, making them more likely to make bad decisions that can perpetuate the cycle of poverty. In fact, Princeton University researchers conclude in a new study, just feeling poor can quickly knock 13 points off a person’s IQ.To determine how financial worries affect thinking, the researchers posed various problems to middle- and low-income shoppers at a New Jersey mall.

The study subjects were asked to make decisions about how they’d spend their money when facing emergency expenses. When the expenseswere large, the cognitive performance of the poorer shoppers fell dramatically—by an equivalent of 13 IQ points or a lost night’s sleep—while the better-off shop­pers’ scores remained the same. “Picture yourself after an all-nighter,” study co­author Sendhil Mullainathan tells The Washington Post “Being poor is like that every day.”

Researchers also ran cognitive tests on farmers in India before their harvest, when they were financially strapped, and afterward, when they were flush with cash; they, too, scored worse when they had less money. “There’s been this perception that the poor function less well,” said Eldar Shafir, the other co-author of the study. “[But] when you don’t have enough [money], it occupies your mind and takes away bandwidth that you could use for other things.”