Our efforts to combat poverty are often based on a misconception: that the poor must pull themselves up out of the mire. But a revolutionary new theory looks at the cognitive effects of living in poverty. What does that relentless struggle to make ends meet do to people?
A world without poverty – it might be the oldest utopia around. But anybody who takes this dream seriously must inevitably face a few tough questions. Why are the poor more likely to commit crimes? Why are they more prone to obesity? Why do they use more alcohol and drugs? In short, why do the poor make so many poor decisions?
Harsh? Perhaps, but take a look at the statistics: The poor borrow more, save less, smoke more, exercise less, drink more, and eat less healthfully. Offer money management training and the poor are the last to sign up. When responding to job ads, the poor often write the worst applications and show up at interviews in the least professional attire.
What if the poor aren’t actually able to help themselves? What if all the incentives, all the information and education are like water off a duck’s back? And what if all those well-meant nudges only make the situation worse?
Read more: Why do the poor make such poor decisions?