Post written by Jane Hunt, former inaugural CEO at Fitted for Work.

On face value, these decisions make no sense and even reinforce the stereotype that the women we assist aren’t very bright.  After all, their decision making shows they can’t manage money and this perpetuates the myth that poor people are somehow responsible for their situation. Or are they?

Well, I am so glad to be able to bust this myth open and share with you the research presented by Professor Eldar Shafir.

Shafir and the research team (click here for the full article in Science) found that poverty itself reduces cognitive capacity. When a person experiences extreme scarcity, such as poverty, all of their mental resources are consumed with the task of alleviating their situation. We all have a limited amount of bandwidth, and it’s expended when dealing with the scarcity issue at hand. So precious little remains for other tasks, such as trying to work out the best way to buy the car they need to get around.

The scarcity issue might be getting a job, finding food, or navigating the challenges of being a single parent. All the other information and decisions that need to be made are relegated to the periphery: definitely not an effective way to operate.  And this effect is profound. The research team estimates it can be equivalent to dropping 15 IQ points.  So, it’s worth repeating: poverty reduces cognitive capacity – and not the other way around, as some would have us believe.

What’s astonishing to me is the incredible impact all of that cognitive ability has on the scarcity that the women we meet are experiencing. I have met women in FFW’s programs who receive $35 per day and can tell you how to get the cheapest vegetables, how to make $10 feed a family for a day and how to juggle utility bills with what’s left over. They become specialists the subject of survival and are absolutely focused on alleviating their financial scarcity.

The implications of this research finding are significant for the way we build and offer our services. Given that poverty-related concerns consume mental resources and leave little capacity for other tasks, two things strike me as important for FFW:

  • What we do is critical – we directly impact a woman’s ability to alleviate poverty by getting a job. But what is even more critical is both the timing of the assistance and how we assist. It has confirmed to me why the Transition to Work program with mentors and staff is so important – the assistance is carefully timed not to overload our client, and the mentors provide the sounding board and guidance to prevent poor decisions from being made.
  • Once the women are successfully placed in work, we need to make sure we consult them on the design and delivery of our programs.  We already do this through our evaluation, but we’ve decided to increase this participation – they are the experts, after all! This feedback will be a critical input into making our programs even more relevant and impactful to women.

The research relates to any form of scarcity, not just to people experiencing poverty. It includes time scarcity and information or task overload (a scarcity of time to take in information, with too many projects and people vying for our limited attention). I’m confident that I share these scarcities with many of you. The startling findings have made me think about how I can manage this better. I know that, like you, I am time poor. But understanding the significant implications of ‘cognitive overload’ and the potential to make bad decisions when all of our bandwidth is allocated to alleviating scarcity, reminded me of the famous Chinese proverb: “One cannot manage too many affairs: like pumpkins in the water, one pops up while you try to hold down the other”.

I’m sure this sentiment rings true for many of us, living in an age of technological innovation and multi-tasking. While it seemed a fitting way to conclude an insightful time in Dalian, this important research has also left me and the FFW team with much food for thought when we assess how we deliver our services with the most impact to women who might be in a situation where their cognitive ability is distracted by the very basic need to survive.