Learning to See the World's Opportunities: Memory, Mental Experiencing, and the Economic Lives of the Vulnerable

Many of the world's poor have experienced trauma. We argue that memories of this trauma interfere with the process of future simulation, diminishing the ability to see how actions today can improve outcomes tomorrow. We introduce guided mental experiencing (GME) -- an intervention in which participants mentally simulate pathways between their actions and desired economic outcomes -- as a response, and study GME's impact in two RCTs. In a population of Eritrean refugees in Ethiopia, GME increases the ability of refugees to see a positive future, increases their intent to stay in Ethiopia, increases labor force participation and improves self-reported welfare. In a population that has experienced violence and poverty in Colombia, a traditional entrepreneurial training program reduces the ability to imagine a future in business and worsens economic outcomes. Integrating GME into entrepreneurial training restores future thinking and removes these negative economic effects. The largest gains accrue to the most traumatized participants in our samples.