Emily Badger summarizes recent research on the subject:
In a series of experiments run by researchers at Princeton, Harvard, and the University of Warwick, low-income people who were primed to think about financial problems performed poorly on a series of cognition tests, saddled with a mental load that was the equivalent of losing an entire night’s sleep. Put another way, the condition of poverty imposed a mental burden akin to losing 13 IQ points, or comparable to the cognitive difference that’s been observed between chronic alcoholics and normal adults.
The lesson Yglesias draws from that finding:
Poor people—like all people—make some bad choices. There is some evidence that poor people make more of these bad choices than the average person. This evidence can easily lead to the blithe conclusion that bad choices, rather than economic conditions, are the cause of poverty. The new research shows that this is—at least to some extent—exactly backward. It’s poverty itself (perhaps mediated by the unusually severe forms of decision fatigue than can affect the poor) that undermines judgment and leads to poor decision-making.