ideas42 Sets Out to Help End Poverty Through Behavioral Interventions

povertyinterrupted

Photo: Peter Kirkeskov Rasmussen

By U.S. Census estimates, one in five children in the United States is living below the poverty line. For a single parent with one child, that’s about $16,000 in annual income. For a family of four with two children, the threshold is just below $24,000.

It’s well documented that the consequences of childhood poverty are immediate and long-lasting. By their first day in school, children in poverty score worse than their middle and upper class peers on nearly every developmental measure from language use to attention skills. As teenagers, they’re significantly more likely to get pregnant, get arrested, and quit school. As adults, they are five times more likely to be living in poverty than to have risen above the bottom quintile.

Poverty is also expensive. Some economists estimate poverty costs the American economy more than $500 billion a year—nearly 4 percent of the GDP—in lost earnings and public spending.

The New York-based nonprofit behavioral science design and research lab ideas42 wants to change this. They recently launched a new initiative called Poverty Interrupted, which aims to help end intergenerational poverty through developing interventions based in psychology and behavioral economics.

Still in its research stage, Poverty Interrupted is focused on helping families with young children—ages 0 to 5—become self-sustaining by addressing the cognitive stressors associated with poverty. Led by Anthony Barrows, a vice president at ideas42, they ultimately want to have a set of interventions that could be used in cities around the country, or even the world,  that together would make a huge difference in how families balance meeting their day-to-day needs while they working towards longer-term goals.

They recently published a working paper detailing some of their initial findings from the past year, during which they led focus groups with low income families, spoke with dozens of experts, and reviewed decades of academic research. In the coming months, they plan to publish a white paper on what they know and which interventions they might look to pilot.

These might include a program teaching mindfulness to help bolster children and parents’ ability to cope with stress or a car service so parents can get their kids to childcare and themselves to work more easily, freeing up precious time and mental energy.

The thinking behind the initiative is based on the finding that poverty has a cognitive tax, an idea illustrated most notably by Princeton psychologist Eldar Shafir and Harvard economist Sendhil Mullainathan in their 2013 book Scarcity: Why Having Too Little Means So Much.

“It’s a bitter irony that we have all these programs, each of which probably does a fairly decent job of providing the services it offers, but taken in total, might not add up to the type of benefit you would assume because they are cognitively taxing.”

They’ve found that living in poverty and experiencing chronic scarcity—continually not having enough money, food, time, or other necessities—imposes a tax on a person’s mental bandwidth. It interferes with a person’s ability to make decisions, plan for the future, and exercise self-control. In one study, scientists estimated poverty’s effect on cognitive ability is the equivalent of losing 13 IQ points.

As with computers, mental bandwidth is limited. If you have to think about how to buy groceries for your family when most of your paycheck went towards rent, then you can’t think about which classes you need to take next semester. If you’re forced to choose between fixing your car so you can get to work or paying the gas bill, then you can’t focus on planning healthy meals for you and your family.

The bitter irony, Barrows points out, is that programs which aim to alleviate some of these burdens actually add a cognitive tax. For families that must apply to and maintain benefits for multiple programs to get their needs met—for housing, food, childcare, transportation, energy, or health care—accessing services becomes its own laborious and stressful task.

“When these programs proliferate, when, in order to survive, you need to access a number of these programs, each of which has its own eligibility criteria, each of which has its own process to maintain your eligibility, each of which is located in a different place, the time and energy that you have to expend proliferates along with those various programs,” Barrows said.

It’s not that these programs don’t work. In fact, without them it could be much worse. For example, the federal earned income tax credit alone is estimated to have lifted 3.3 million children out of poverty in 2012. It’s that, taken together, the benefits of these programs don’t add up to what one might expect, Barrows said.

This is where behavioral science comes in. By strengthening children and parents’ ability to cope with the added stress of poverty while introducing interventions that make accessing services easier and less mentally draining, families will have a better shot at becoming self-sustaining.

One issue they address in their working paper is access to child care. Finding safe, affordable child care can be stressful for any young family, an issue President Barack Obama recently spoke to in his State of the Union Address. For low-income parents, who likely work inconsistent and nontraditional hours, finding a caregiver can be particularly challenging. Many must rely on multiple babysitters. The time and mental energy it takes to balance a constantly changing schedule along with the instability that interferes with a child’s healthy development, makes childcare a particularly important challenge to address.

As a solution, ideas42 might work with a childcare facility to extend its operating hours or provide a weekly credit for a car service to help parents get there and back. Another solution could be providing an on-call babysitter, who could come on short notice if parents find themselves in a pinch.

Whatever they do, the aim is not to solve one problem, but to address multiple stressors at once.

“We don’t want to necessarily think about ourselves as doing a child care intervention or a housing intervention,” said Allison Daminger, one of Poverty Interrupted’s researchers. “We’re most interested in looking at the drivers of bandwidth tax and figuring out ways to diminish those.”

But before launching any program, Barrows says they’ll be piloting interventions and testing their efficacy through randomized control trials. What they end up doing, largely depends on who they partner with in the coming months, but they hope to be piloting three to five interventions aimed at fighting the cycle of poverty by the end of next year.

(Full disclosure: Eldar Shafir is a Scientific Director at ideas42 as well as a member of The Psych Report‘s Board of Advisors. He did not participate in any way in this story.) 

Further Reading and Resources

ideas42 (2014). Poverty Interrupted: Combating Intergenerational Poverty with Behavioral Economics: Working Paper.

Ratcliffe, C., & McKernan, S. M. (2012). Child Poverty and Its Lasting Consequence. Low-Income Working Families. Paper 21. Urban Institute.

Heckman, J., Pinto, R., & Savelyev, P. (2013). Understanding the Mechanisms Through Which an Influential Early Childhood Program Boosted Adult Outcomes. The American Economic Review. 

Babcock, Elisabeth. (2014). Using Brain Science to Design New Pathways Out of Poverty. Crittenton Women’s Union. 

Center on the Developing Child at Harvard University (2011). Building the Brain’s “Air Traffic Control” System: How Early Experiences Shape the Development of Executive Function: Working Paper No. 11.

 

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