New report reviews the psychological research into the causes and consequences of poverty

A new report by the University of Oxford and the Joseph Rowntree Foundation—Psychological Perspectives on Poverty by Ben Fell and Miles Hewstone—reviews the psychological research into the causes and consequences of poverty.

Structured around four main areas, the main findings are:

Social processes

Those in poverty are often perceived negatively by others, viewed with contempt, their poverty seen as resulting from personal failings rather than misfortune or societal factors. Such stereotypes can severely disrupt attempts to reduce poverty. Intergroup contact is recommended as a potential tool to improve attitudes, promote positive emotions (e.g. empathy), and disrupt negative stereotypes. Those in poverty could also be included as a key target group in attempts to promote social integration.

Negative stereotypes affect self-perception among those in poverty, reducing people’s belief in their own competence and ability to succeed (self-efficacy), leading to poor physical and psychological health as well as reduced educational and professional prospects. Non-financial support for those in poverty could therefore involve boosting assessments of self-efficacy.
Mental health

Poverty is both a causal factor and a consequence of mental illness, including schizophrenia, depression, anxiety, and substance addiction. One common remedy for mood and anxiety disorders is social support, but maintaining strong social networks with others also in poverty can lead to “stress contagion.” Alternatively, social support networks that include people from a range of socio-economic backgrounds could be encouraged. However, as noted by our author Xi Chen, “People who are unable to maintain the same standard of living as others around them experience a sense of relative deprivation that has been shown to reduce feelings of well-being.”

Genes and environment
A low-socio-economic status environment has been shown to limit cognitive development, preventing children raised in poverty from achieving their full “genetic potential.”
Offsetting the early environmental deprivation associated with poverty is therefore a critical step in disrupting the intergenerational cycle of poverty.

Brain and cognition
Children raised in environments of low socio-economic status show consistent reductions in cognitive performance across many areas, particularly language function and cognitive control (attention, planning, decision-making).

Resource scarcity induces a “scarcity mindset,” characterized by an increased focus on immediate goals at the expense of peripheral tasks and long-term planning. This again may contribute to perpetuating the cycle of poverty. Proponents of the scarcity hypothesis suggest initiatives such as reducing the number of decisions someone has to make, for example when claiming benefits, or financial reminders as techniques that could reduce this cognitive strain.

Fundamentally, poverty is an economic issue, not a psychological one. However, the report indicates that understanding the psychological processes associated with poverty can improve the effectiveness of economically focused reform.

Our author Martin Biewen stresses that “not all people who are poor are persistently poor.” Unemployment, retirement, and single parenthood are closely associated with persistent poverty and higher education tends to protect against it. Policy should aim to prevent people from falling into poverty because once poor, the probability of being poor in the future increases—the poverty trap. “Policies that promote education, employment, and attachment to work will be most effective in reducing persistent poverty, along with policies that strengthen family and job stability (such as childcare subsidies).”

Read the full report here:

Related articles:
Relative deprivation and individual well-being, by Xi Chen
Poverty persistence and poverty dynamics, by Martin Biewen