Yet Another Reason Being Poor Is Hard

When you grow up in an environment where things are scarce, that can cause you to develop habits that don’t serve you well when things become less scarce:

Just as modern economies undergo periods of boom and bust, human ancestors experienced cycles of abundance and famine. Is the adaptive response when resources become scarce to save for the future or to spend money on immediate gains? Drawing on life-history theory, we propose that people’s responses to resource scarcity depend on the harshness of their early-life environment, as reflected by childhood socioeconomic status (SES). In the three experiments reported here, we tested how people from different childhood environments responded to resource scarcity. We found that people who grew up in lower-SES environments were more impulsive, took more risks, and approached temptations more quickly. Conversely, people who grew up in higher-SES environments were less impulsive, took fewer risks, and approached temptations more slowly. Responses similarly diverged according to people’s oxidative-stress levels—a urinary biomarker of cumulative stress exposure. Overall, whereas tendencies associated with early-life environments were dormant in benign conditions, they emerged under conditions of economic uncertainty.

As technology increases the returns of capital relative to labor, there is worry that economic inequality will breed more inequality. This paper is a reminder that there are also psychological reasons why the rich get richer and the poor get poorer.

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