Breaking the Cycle of Poverty: New Insights

Nov 7, 2014 | By ideas42 in Blog

45.3 million: The number of Americans living in poverty in 2013. 

$500 billion: The estimated cost of poverty in the United States each year, including public expenditures and lost earnings.

In response to these startling statistics, ideas42 recently launched the Poverty Interrupted initiative, a radical venture aiming to use insights from behavioral science to help break cycles of long-term poverty in America. Given that children born into the lowest income quintile are nearly five times more likely to remain in the bottom 20% than to rise out of poverty as adults, the need (and potential) for impact is massive.

Poverty Interrupted is focused on parents with young children, and is built around an approach that addresses the needs of parents and children simultaneously, as well as striving to meet all of a family’s complex needs in a holistic way, rather than provide a separate service for each.

In a recently published working paper, we present an initial look at what behavioral economics can offer in the poverty alleviation space. The paper points us toward the design and deployment of effective interventions in partnership with key service providers across the United States. We’ll publish a more in-depth paper in early 2015 exploring the intersections between poverty alleviation and behavioral economics and propose specific program and policy solutions in early 2015.

By applying behavioral insights and rigorously evaluating our interventions, we hope that Poverty Interrupted will make an important contribution to efforts to reduce the number of families living in poverty and poverty’s price tag for society. With an informed understanding of scarcity, its effects on our “mental bandwidth”, and its tendency to amplify other behavioral barriers, our work can help give millions of hardworking families a better chance of escaping poverty.

For more information about this landmark initiative or to get involved in the fight to interrupt poverty for good, please contact ideas42 Vice President Anthony Barrows: