Money worries can enhance performance on some kinds of mental test

Poverty erects material barriers, but psychological ones too, from the conditions that exacerbate mental health problems, to inculcating children with the sense that they are second-rate. A stream of recent research has suggested that financial concerns can also tax your mind and prevent you from thinking clearly. But that may be too sweeping a conclusion, according to Junhua Dang of Lund University and his colleagues in Sweden and China. Their study, published in the Scandinavian Journal of Psychology, suggests having money problems on the mind doesn't always impair cognitive ability. In fact, it can even enhance it.

The prior studies had shown worse performance on intelligence tests by poorer participants when they were asked to think about financial issues beforehand, because of how these issues loaded their "working memory" – their ability to hold and process information over short time periods – thus hindering the mental manipulations the tests required. But working memory isn't key to all cognitive work, so Dang's team set out to see if other kinds of mental tasks would be unaffected by monetary angst.

The participants performed a categorisation task, some of them after being prompted to think about their financial woes. They then viewed a series of basic but rich images – a shape that could be square or circle, yellow or blue, and contained one or two symbols coloured red or green – and attempted to sort each one into the correct category A or B. There was a learning element to the task provided by feedback after each image, telling them whether they'd made the correct categorisation or not.

Category membership didn't rely on a formal rule, e.g. "Category A contains all yellow squares";
instead, it depended on a looser accumulation of properties: the most A-like shape might be yellow and square with a single red symbol, but you could swap out any one or even two of those qualities, and it would still count as an A.

This kind of challenge is known as a "procedural cognition" task because success depends more on automatic processes rather than consciously thinking it through. In fact, judgments based on similarity and gut feeling are usually a better tactic than trying to test out and juggle different explicit rules. Crucially, the gut feeling approach doesn't require spare working memory capacity and can even be facilitated by a lack of it. Therefore financial woes might be expected to enhance rather than hinder the performance of poor people on the categorisation task.

That's what Dang's team found in their sample of 97 student participants. Those who were reminded of their money worries, and those with below-average family income (relative to the other participants), performed better on the task, being quicker to meet the success criteria of eight correct categorisations in a row.

The authors argue this matters because highly conceptual activities, such as those measured by intelligence tests and which require lots of deliberate mental calculation, may not be a fair reflection of the kinds of mental work that lower-income people often engage in or depend on in their jobs. For example, a trucker is likely to rely much more on the relatively automatic and instinctive processes that make up safe, effective driving. This is not to make a facile argument such as "financial stress is good for the poor", but rather to make the point that even if such stress does impede some parts of poorer people's lives, in other capacities they will be able to operate strongly in spite of, or even in small part due to, this stress.

This relates to a wider point that Dang makes in a commentary on the previous research, which is that although stress is unwelcome, it does have a function, which is to narrow our focus "away from irrelevant tasks (which IQ tests arguably are) toward relevant tasks (which financial decision making arguably is)." This research, therefore, is part of a wider body suggesting that the consequences of poverty are not unrelentingly negative, but varied and multifaceted.

Further reading

—When the poor excel: Poverty facilitates procedural learning