More Welfare, Less Healthcare

An interesting psychology finding which should be of immense policy relevance: being poor makes people dumber.  This doesn’t refer to environmental effects like lead, which are also very important.  Instead, it’s linked to what psychologists call “decision fatigue“.  Not having money, even when one is relatively comfortable (i.e., not living on the street), ups the stakes of everyday decisions.  The question of whether to ride the bus or drive takes on new urgency when gas eats up a huge chunk of your paycheck and when a parking ticket could impact your food budget for the month.  However, you have to be on time, because showing up late for your minimum-wage McJob would get you fired on the spot.  The stress of all these decisions wears people out, literally creating mental fatigue from decisions.  With that much on your mind, it’s harder to think logically and make other decisions.

More prosaically, the mental stress of poverty makes people that much worse at improving their situation.

If we take this study at face value, it is a powerful argument for greater government assistance in cash as opposed to in-kind support (e.g., food stamps, Medicaid).  The author suggests the opposite, which I think is the exact wrong takeaway.  Receiving and utilizing in-kind assistance takes a lot of mental effort; using Medicaid is much more difficult and stressful than employer-provided insurance, which is no walk in the park itself.  On the other hand, cash grants don’t require any separate mental effort once they are signed up for, and more importantly they make everything else easier.   The decision about whether to take the bus or drive gets that much easier when you don’t have to worry about the single unexpected fender-bender that could wipe you out.

This is pretty intuitive when phrased in non-sociological terms. I think if you asked the average nonpoor American whether their life would be easier and less stressful with more money, they would tell you to stop asking such stupid questions.  It’s unfortunate that the welfare state’s political economy augurs so strongly for providing in-kind assistance, because giving out cash might actually help people a lot more than an equivalent dollar value of food stamps, healthcare and so on.  Given the political climate in Washington, this idea will have to be filed away as “maybe try in a pilot program in Massachusetts”.

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