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How Poverty and Cognitive Biases Can Impact Decisions and Action: Using Research from Behavioral Economics and Psychology to Improve Workforce Development Services

This report explores the latest research around how decision-making and actions are influenced by poverty and outlines research-driven strategies that workforce providers can use to help workers become more self-sufficient.
Author(s): 
Matt Helmer
Author(s) Organizational Affiliation: 
Seattle Jobs Initiative
Published: 
2015
Resource Type: 
Product
Number of Pages: 
39
Abstract: 

In the workforce field, participants’ choices or behaviors that harm their ability to be successful in school or work are often attributed to a lack of soft skills, motivation, or work ethic. While individual responsibility cannot be ignored, the unique circumstances and context of poverty and other cognitive biases can contribute to an individual’s actions. Behavioral economics and psychology research point toward some interventions that workforce development practitioners can use to address some of the barriers presented by poverty and human biases. These strategies, which may help unleash individuals’ potential and strengths, include the following:

  • Providing decision-making, goal-setting, and planning supports
  • Removing hassles and using channel factors
  • Using reminders
  • Using public and private commitments
  • Using default options or prompted choices
  • Categorizing or grouping choices
  • Providing appropriate anchor or reference points
  • Framing choices around gains and loss
  • Providing early rewards
  • Priming positive identities
  • Using social proof and social influence
  • Providing communications, workshops, or tutorials on the brain and learning

Other features of the report include:

  • “In Focus” examples provide insight into how some of the strategies have been put into practice
  • a four-step process for testing interventions and strategies
  • recommendations for the workforce development system to consider in light of what is being learned from economics and psychology
  • guidance on what interventions may be appropriate in specific circumstances (Appendix A)
What the Experts Say: 

How Poverty and Cognitive Biases Can Impact Decisions provides adult educators with tools for handling the frustrating, self-undermining behaviors and counterintuitive decision-making frequently seen among their students. With the greater emphasis on workforce preparation under WIOA, this paper provides practical, immediate advice to instructors who know that simply teaching resume writing and interviewing preparation will not change the underlying behaviors that sabotage student success. Administrators and classroom practitioners could use this resource to design action plans for classroom and counseling use.

This publication starts the conversation about prevalent and pervasive internal barriers to success experienced by adult education students and provides strategies for overcoming them. These internal barriers may be more significant and pervasive than external barriers such as transportation and childcare. This particular publication examines poverty, but there are other conditions that may also influence mindset, self-identity, and self-efficacy leading to consistently less than desirable choices and decision-making. It also provides recommendations for workforce development practitioners to reduce conditions of economic scarcity that impact their clients’ choices and actions.

No attempt was made to tie the research cited to adult learning theories. Granted, little descriptive or experimental research has been with adult learners and the importance of positive self-identity and perception to motivation is undeniable.

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