WTF Fun Fact 13008 – Financial Stress Lowers IQ

Fun Fact: “A Harvard study found that our IQs can drop by 13 points when we are under financial stress. This is in part due to the amount of brain power we use to think about any financial burdens we carry, causing distraction.”
Are you surprised to hear that financial stress lowers IQ?

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According to Canada’s CBC News (cited below), “People struggling to pay their bills tend to temporarily lose the equivalent of 13 IQ points, scientists found when they gave intelligence tests to shoppers at a New Jersey mall and farmers in India. The idea is that the financial stress of trying to make ends meet monopolizes thinking, making other calculations slower and more difficult, sort of like the effects of going without sleep for a night.”

Financial stress and IQ

We know IQ tests aren’t reliable indicators of innate intelligence, but they can be used to measure changes in a person’s cognitive capacity under different conditions. In other words, we don’t have to compare a person’s scores to anyone else’s, we can compare their specific scores without making judgments about their overall intelligence.

CBC described the study:

“The scientists looked at the effects of finances on the brain both in the lab and in the field. In controlled lab-like conditions, they had about 400 shoppers at Quaker Bridge Mall in central New Jersey consider certain financial scenarios and tested their brain power. Then they looked at real life in the fields of India, where farmers only get paid once a year. Before the harvest, they take out loans and pawn goods. After they sell their harvest, they are flush with cash.

[Harvard researcher Sendhil] Mullainathan and colleagues tested the same 464 farmers before and after the harvest and their IQ scores improved by 25 per cent when their wallets fattened.”

What the study doesn’t mean

The study does not mean that rich people are smarter than people who are having temporary or long-term financial difficulties. It only means they have more cognitive resources to “spend.” They can think more clearly and concentrate better on other tasks since they’re not worried about money.  WTF fun facts

Source: “Financial stress can induce drop in IQ” — CBC News

WTF Fun Fact 12425 – Dolly Parton’s Graduation Gift

In 1991, actress and country music legend Dolly Parton and The Dollywood Foundation decided to address the high school dropout rate in her hometown of Sevierville, Tennessee.

According to her website: “In the early 1990s, there was a dropout problem in Sevier County schools. Over 30% of all students never graduated a decision which not only crippled their own lives but made it increasingly difficult for Sevier County to prosper.”

Research from The Dollywood Foundation suggested that many students’ decisions about whether to graduate were rooted in their experiences in seventh and eighth grades. So it made sense to target these students for special encouragement. Parton herself suggested a monetary award.

The Buddy Program, as it came to be called, was announced to students that same year.

Her website explains: “In 1991, seventh and eighth-grade students were invited to a special assembly in the newly built Dolly Parton Celebrity Theatre at Dollywood…Dolly told the students that day she wanted each of them to choose a Buddy, and if they didn’t have a Buddy, she would find one for them. She went on to make a very special announcement: she offered to personally give $500 to each and every student in the seventh and eighth grades if they graduated from high school. However, there was one additional requirement: each student’s Buddy must graduate as well, and they had to sign a contract to pledge to do everything they could to make sure both graduated.”

The reward ensured that students would be both encouraged to graduate and stay accountable to one another in order to receive the money. And it worked!

The dropout rate went from 30% to 6%. – WTF Fun Facts

Source: “Dolly launches ‘The Buddy Program’ in Sevier County, Tenn., to tackle local dropout rates” — DollyParton.com