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Publication
Financial scarcity and cognitive functioning: a meta-analysis
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Advisor(s)
Abstract(s)
Whereas several studies find that financial scarcity has a detrimental impact on cognitive
functioning, some studies find no relationship and others even report beneficial effects. To
shed light on this issue we conducted a meta-analysis on the relationship between financial
scarcity and cognitive functioning. We went beyond testing the direct relationship between these two concepts and looked at potential moderators, namely education, the moment of
scarcity, the severity of scarcity, the type of tasks used to assess cognitive functioning, and
the type of study. Our findings suggest that scarcity does have a detrimental effect on
cognitive functioning. Across 256 effect sizes from 29 datasets involving 111,852
respondents, we found a detrimental total effect of scarcity on cognitive performance of
Hedge’s g = -0.43. We then estimated a meta-regression model of the drivers of the effect of
scarcity on cognition. Education strongly explained this relationship, reducing the effect size
by 60% (partial effect of scarcity on cognitive performance is Hedge’s g = -0.15, when
accounting for education), to a small effect size. The moment and the severity of scarcity also
contribute to this relationship, by moderating the effect, such that lifetime and adulthood
scarcity have a larger effect than childhood scarcity, and more extreme levels of scarcity lead
to higher cognitive dysfunction. The type of task used to assess cognitive functioning did not
moderate the effect. And when controlling for education, higher effect sizes were found for
non-correlational designs. We discuss these findings and their implications in light of existing
research and theories.
Description
Keywords
Financial scarcity Poverty Cognitive functioning Procedural processes Working memory
Pedagogical Context
Citation
de Almeida, F., Scott, I.J., Soro, J.C., Fernandes, D., Amaral, A.R., Catarino, M.L., Arêde, A., Ferreira, M.B. (2024). Financial scarcity and cognitive performance: a meta-analysis. Journal of Economic Psychology, 101. https://doi.org/10.1016/j.joep.2024.102702