Investing in interventions to break the psychological poverty trap – Evidence from Kolkata Brothels

By Professor Sayantan Ghosal, Adam Smith Business School

Poverty is not only a social and economic condition, it also affects individual psyche, self-esteem and self-confidence. Despite the importance of this psychological dimension its implications are less discussed in development debates and policies. Innovative research in the field of behaviour economics from the University of Glasgow shows how self-image distorted by stigma can lead to behaviours that reinforce poverty i.e. a psychological poverty trap. Importantly, it demonstrates that specific interventions to address low self-esteem can have a positive impact on wellbeing indicators such as agency, happiness, aspiration, savings and health.

How does the experience of stigma affect self-image and attainment? Being poor or marginalised is often accompanied by stigma. Negative perceptions and attitudes affect how people see themselves distorting their self-image. Those experiencing poverty can develop significantly lower levels of confidence in their own ability to succeed. They thus limit their choices and aspirations and focus on short term goals. This mind set can generate negative physical and psychological health consequences, along with reduced educational and professional achievement.

However, the research findings demonstrate that an exclusively psychological intervention with no material incentives, can lead to significant and sustained positive behaviour changes, by restoring a damaged self-image. The research conducted a randomised control trial to evaluate the impact of the psychological training programme Dream Building which aimed to improve the self-image of sex workers in Kolkata. The program consisted of eight group sessions run over eight weeks during which experienced trainers attempted to reshape sex workers’ impaired self-image through interactive discussion, verbal persuasion and role-playing. The training was developed and conducted by Durbar, a Kolkata-based non governmental organisation that has been providing support sex workers for over 25 years.

The evaluation results show not only that the training programme generated positive effects in the short term, but that these effects persisted in the medium term as well.  The programme improved women’s sense of self-worth and ability to face challenges. Regarding health and savings, programme beneficiaries were 53 percentage points more likely to continue to use their savings account 15 months after participating in the training. They also had bank balances four times larger than those in the control group. Furthermore, beneficiaries were 15 percentage points more likely to continue attending health check ups 21 months after the end of the programme.  

In the next stage the research will further expand the understanding of the link between poverty, marginalisation and stigma and economic and health outcomes. It will construct a unique data panel set of over 10,000 sex workers in Kolkata containing financial, health and socioeconomic information as well as participation in the Dream Building programme. This data set will be used to examine how financial and health behaviour correlate with each other and how initial conditions such as age, socio-economic characteristics, family background and exposure to coercion matters for the financial and health outcomes of sex workers. It will also enable an analysis of how the contracts used by sex workers also impact on their welfare. Researchers will work in close partnership with the Usha Cooperative a multipurpose organisation formed by sex workers in Kolkata. 

The study will provide systematic evidence on how and why marginalisation and stigma impact behaviour and wellbeing.  It will make a significant contribution to debates around the role of empowerment in poverty reduction strategies and the importance of interventions that seek to improve people’s self-esteem and aspirations. The insights can also inform policies and programmes targeted at other groups of vulnerable women working in the informal sector, contributing to achievement of Sustainable Development Goal 5 Gender Equality. Research findings will be disseminated on a dedicated website and presented in a policy report aimed at government agencies and non-government organisations working with marginalised groups.


This research is funded by the Economic and Social Research Council.

Follow this link to find out more about the Usha Cooperative.

To find out more about Durbar and the Dream Building programme go to https://www.durbar.org/.

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First published: 3 March 2022

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