Poverty and all of the related concerns that comes with it require a large amount of mental energy. It requires so much that the poor actually have less brainpower to devote to other areas of their life, according to new research from Princeton University. As a result of reduced brainpower, those living in poverty are more likely to make mistakes and bad decisions that will amplify their financial problems.

The study, published in the journal Science, provides a unique perspective on what causes persistent poverty. Researchers suggest that being poor can keep a person from concentrating on things that could lead them out of poverty. Cognitive function is reduced by the constant effort needed to cope with the immediate effects of having very little money, like paying bills and reducing costs. This leaves a person with fewer mental resources to focus on more complicated and indirect matters, like education, job training and even time management.

Through a series of experiments, researchers discovered that pressing financial concerns have an immediate impact on the ability of low income people to perform common cognitive and logic tests. Persons preoccupied with money issues, on average,  showed a drop in cognitive function similar to a 13-point drop in IQ or losing a whole night’s sleep.

When concerns were benign, low income people performed at similar levels to people who were financially secure, corresponding author Jiaying Zhao said. Zhao conducted the study as a doctoral student in the lab of co-author Eldar Shafir, Princeton’s William Stewart Tod Professor of Psychology and Public Affairs. Both worked with Anandi Mani, associate professor of economics at the University of Warwick in Britain, and Sendhil Mullainathan, an economics professor from Harvard University.

“These pressures create a salient concern in the mind and draw mental resources to the problem itself. That means we are unable to focus on other things in life that need our attention,” said Zhao.

The first set of experiments were conducted in a New Jersey mall between 2010 and 2011. About 400 subjects were chosen at random, with median income in the group being about $70,000 and the lowest being about $20,000. Researchers created scenarios where the subjects had to think about how they would solve financial problems, like whether they would pay for a sudden car repair by paying the bill in full, borrowing money for the repair or putting it off completely. Each subject was assigned either an easy or a hard scenario where costs were low or high, like $150 to $1,500 for the car repair. While they thought about how they would approach the scenario they performed common fluid intelligence and cognitive tests.

The subjects were divided into a poor group and a rich group, based on their income. The experiment showed that both groups performed equally well when the scenario was easy, but subjects with lower incomes performed worse  than the rich group on cognitive tests when the scenario was hard.

Researchers suggest that services for the poor should accommodate the dominance poverty has on a person’s time and thinking by offering simpler forms and more guidance, or training and educational programs that are more forgiving of unexpected absences.