The Psychology of Poverty and Welfare Reform

In the last few weeks in the UK there has been a surge in high profile figures – from TV chef’s to government ministers – blaming ‘poor people’ for their poverty. In this guest post, Joe Penny from the new economics foundation summarises recent research from behavioural psychologists on how poverty itself makes it harder to make good decisions (building on Rob’s post earlier this week that went into one part of this research in more detail), and explains why this matters for welfare policy and reform.  

Picture 1First there was Jaime Oliver, claiming that he couldn’t quite grasp poverty in the UK, where people made choices between massive TVs and nutritious food. Then, more recently, Michael Gove suggested that the rise in people accessing food banks was a result of poor financial management, rather than genuine need due to falling living standards and benefit sanctions.

Oliver and Gove are, of course, not alone in thinking or expressing these views. Narratives of welfare dependency have become more common place and increasingly assertive under the coalition government;  the the so-called Skivers and Strivers dichotomy is a well-known case in point. Poverty, according to this perspective, is caused by a culture of deviance, idleness, and dependency. The poor are responsible for their own plight. They cannot be trusted to make the right choices for themselves – or society more generally – and so are in need of paternalistic guidance (hence the current raft of welfare reforms).

But recent research suggests that this ignores the way in which poverty changes all of our decision-making – as I explain in this post.

The evidence on bad decisions

Picture 2To suggest, or even allude to the idea, that poverty is simply about the choices we make is to completely ignore broader trends – in employment (quantity and quality), wages, the cost of living and living standards – that are all quite beyond the control of individuals. It is also to ignore the role that this government’s welfare reforms are playing in hitting the poorest hardest.

Of course, this is not to say that choices are irrelevant. We are not simply passive victims of economic forces and government policy – even if they do shape our room for manoeuvre, and constrain some far more than others. People can still make some choices. Yet, Gove and co don’t just place too much emphasis on individual autonomy and the times when poor people make ‘bad’ choices, they also imply that poor decision making is itself an innate feature of poor people. This confuses cause and effect.

Recent research from Harvard, Princeton and Warwick Universities has been taking a close look at what they call the “psychology of poverty”. Using tried and tested methods (see here for a good review of some of the tests) psychologists argue that our cognitive resources are finite. There is only a certain amount of things we can focus on at any one given time in our lives. There are also limits to our self-control. So far, so obvious. However, they continue to demonstrate how living in a state of poverty reduces these resources, impairing our functionings and affecting our ability to make effective decisions and, in the long term, flourish. Poverty, they argue, means having to make a great many more complex and mentally taxing choices. This fills up our “cognitive bandwidth” and means there is less space for self-control, attention, problem solving and everyday life skills:

“When your bandwidth is loaded, in the case of the poor… you’re just more likely to not notice things, you’re more likely to not resist things you ought to resist, you’re more likely to forget things, you’re going to have less patience, less attention to devote to your children when they come back from school.” (full article here)

These findings are significant. They show that the decisions we make when in a state of scarcity and precariousness are often different, and less efficacious, from those we make when in a state of plenty and security.

From psychology to policy

This sort of research should be shaping our approach to welfare reform for at least two, connected, reasons.  First, it robustly undermines claims that poverty is the result of poor decision making, showing instead how living in a state of scarcity, “experienced as a result of economic instability and poverty”, reduces our finite cognitive resources which in turn affects the decisions we make.  Secondly, based on this finding, it suggests a complete rethinking of how we reform welfare – moving us away from the “race-to-the-bottom” welfarism we have now, towards a model of actual social security and genuine support.

Rather than making support for people more punitive, conditional and insecure – as nef’s research has documented – the government should be designing support that stabilises people in their lives. This means rethinking sanctions, narrow work capability assessments and levels of financial support. It also means working with people to shape support that meets their needs and wants, and builds social and emotional capabilities. In this way people will, in time, be much better placed to develop their functionings and capabilities, which will also make them more likely to do what the government state they want them to – find and stay in paid employment.

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20 Responses to The Psychology of Poverty and Welfare Reform

  1. I’d love to know what this https://www.gov.uk/government/organisations/behavioural-insights-team group thinks of the recently extraordinarily moronic and immoral ‘welfare’ policies.

  2. samspruce says:

    What upsets me about this perspective is that it has been known for a long time and much as there is more and more evidence to support these views the situation gets progressively worse. There is something else going on and it has to do with the inter-relationship of the abuser and the abused. I don’t have the answer but I am sure there is one – or at least I sincerely hope there is. But whilst we work on the solution it is still worth promoting and disseminating the research and theories because I suspect ‘education’ (a word sadly polluted by modern authoritarianism) is part of the solution.

  3. A number of worthy points are made in this article which is essentially a criticism of the common belief that “They (the poor) cannot be trusted to make the right choices for themselves – or society more generally – and so are in need of paternalistic guidance (hence the current raft of welfare reforms).”

    The article concludes “The government should be designing support that stabilises people in their lives” and “make them more likely to do what the government state they want them to – find and stay in paid employment”.

    It’s funny how that paternalistic agenda remains the bottom line for almost all commentary. Paid employment is assumed to be the ultimate by even “enlightened” thinkers who thereby ignore it as a possible contributing factor in the creation and maintenance of poverty. Also neglected is the possibility that that very “paternalism” and the nature of “employment” might be considerations in the choices some poor people to be UN-employed, and all the richer for it. We should look deeper.

    If some of the choices the poor are making which involve UN-employment are sensible and not “poor” choices for them at all, why is the paid employment agenda assumed to be so necessary that it is imposed, and what is the “poverty” impact of imposing it paternalistically upon them?

    The employment agenda is first and foremost for the government’s own purposes – in democracy governments, the idea of channeling wealth to wealth creators holds sway and the poor are said to get trickle down benefits, IF they comply. When government uses evidence about how employment alleviates poverty, poverty is not the issue and any poverty alleviation that might result from paid employment is quite secondary. Taxes are the real issue and it is easy to sell anxiety over the tax burden to taxpayers.

    So if unemployment doesn’t necessarily result in poverty, but the government agenda is getting stricter, we can conclude that concern about the economy and the will of majority voters is the issue, not the poor.

    Instead let’s put the poor first, even if only in our thinking, just to see what could possibly happen and what taxpayers might be quite willing to support.

    Let’s just assume that the poor COULD be trusted to make the right choices for themselves – or society more generally – and so are in NO need of paternalistic guidance (hence that the current raft of welfare reforms should take a different direction). In making this suggestion, I’m not suggesting any lack of accountability, just an end to paternalism.

    The reform to welfare conditions I would like to see is described at https://www.facebook.com/pages/Change-Centrelink-Activity-Test/111159512287661?id=111159512287661&sk=info

    One outcome I would like to support is described at http://ntw.net46.net/NTWmodel/NTWModeloverview.htm

    Regards
    Chris Baulman

    @landrights4all

  4. So glad I came across your blog as we in Australia have a Conservative(Liberal/National Coalition) who are doing exactly the same thing as you describe. They hope to get a budget passed which I can only see will have the consequence of tipping more into a life of poverty and homelessness and mental illness. They obviously don’t care.
    There is widespread alarm about kicking the poor without real plans to change policies which make the rich richer like superannuation rebates and negative gearing.
    I am personally political at :
    http://woman-in-labor-alp.blogspot.com.au/

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