The persistence of poverty in the context of financial instability: A behavioral perspective

Lisa Gennetian, Eldar Shafir

Research output: Contribution to journalArticle

Abstract

We review recent findings regarding the psychology of decisionmaking in contexts of poverty, and consider their application to public policy. Of particular interest are the oft-neglected psychological and behavioral consequences of economic scarcity coupled with financial instability. The novel framework highlights the psychological costs of low and unstable incomes, and how these can transform small and momentary financial hurdles into long-lasting poverty traps. Financial instability, we suggest, not only has obvious economic ramifications for well-being, but it also creates the need for constant focus and attention, and can distract from the very opportunities otherwise designed to alleviate the effects of poverty. We describe a variety of public policy strategies that emerge from this perspective that are not readily apparent in conventional theories that permeate the design of social programs.

Original languageEnglish (US)
Pages (from-to)904-936
Number of pages33
JournalJournal of Policy Analysis and Management
Volume34
Issue number4
DOIs
StatePublished - Jan 1 2015

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persistence
poverty
public policy
economics
psychology
well-being
income
costs
Public policy
Economics
Psychological
Poverty
Persistence
Financial instability
Social programs
Well-being
Poverty trap
Psychology
Costs
Scarcity

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Sociology and Political Science
  • Public Administration

Cite this

The persistence of poverty in the context of financial instability : A behavioral perspective. / Gennetian, Lisa; Shafir, Eldar.

In: Journal of Policy Analysis and Management, Vol. 34, No. 4, 01.01.2015, p. 904-936.

Research output: Contribution to journalArticle

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