Individuals are not robots and, therefore, we need to recover energy, and we do it by sleeping. Sleeping is the activity that people spend the most time doing in a normal week. In fact, lack of sleep contributes to the desynchronization of circadian rhythms, weakens the immune system and can end up affecting individual autonomic functions and cognitive activity, in addition to physical and mental health.
By sleeping, we repair the heart and blood vessels, we help maintain balance. healthy balance of hormones that make us feel hungry and influence how we react to insulin, among other things. Lack of sleep predicts poor behavior Healthy related to a modern society such as psychosocial stress, an unbalanced diet, lack of physical activity, among others..
Although spending enough time sleeping is essential for optimal physical and psychological well-being, we do not always get enough sleep to feel rested. Partly because the quality of sleep is not completely controlled by people (it is subject to experiences and emotions that we live daily in our professional and personal lives), and partly because we have other planes or fall into other temptations. Commuting time, financial worries, work stress, plus sugary diets and mental health can all influence sleep..
Lack of sleep is so widespread among the population that when asked people what they would do with an unexpected increase in weekly time, the most common response is to sleep further. Luckily, sleep patterns differ between weekdays and weekends, since unstructured time allows us to satisfy our sleep needs weekly. Some of us sleep more on weekends and others have taken to daytime naps to compensate for this chronic lack of sleep. All this explains the increase in the dispersion of sleep time during recent decades.
Classic textbook microeconomic models pose the dilemma between dedicating time to leisure or work, without considering the time spent sleeping, which is assumed to be constant. But luckily, advances in health and behavioral economics allow us, little by little, to consider the restrictions not only of time, but also of the physiological and mental ones that we face as individuals derived from the need to sleep.
Socioeconomic determinants of sleep quality
Between the Social determinants It should be noted that sleep quality is affected by changes in exposure to light, noise or the use of communication technologies (mobile), Internet access or television. For example, the intensity of light in homes has an environmental influence on sleep quality, since natural melatonin is influenced by light exposure. Likewise, the time spent using technologies can compete with the time individuals would spend sleeping without them, making them «digital temptations», not only reducing sleep time, but increasing exposure to blue light technologies just before going to sleep. Finally, those of us who are or have been parents will have had the wonderful fortune of seeing first-hand how Sleep quality is affected by the presence of children in the home.
Between the economic determinants, any economist who has read Gary Becker’s time allocation theory would highlight the role of the opportunity cost of sleep, that is, the utility gain in terms of leisure and work derived from allocating time to other things. Higher pay and responsibility, or an intense nighttime social life, can take their toll in terms of lack of sleep. For example, a classic estimate suggests that a 1-hour increase in work time causes a 13-minute reduction in sleep..
Obviously, the cost of sleep can vary over people’s life cycles, and even across seasons and time zones. What we also know is that this The opportunity cost of sleep is exogenously influenced by the economic cycle, and some studies estimate that sleep duration is countercyclical (you sleep better when economic activity slows down), and instead, sleep duration decreases when economic activity slows down. economic yes recuperate.
The effect of sleep on productivity.
Sleep not only produces an effect on well-being through the direct utility derived from its consumption, but also through the greater income and productivity of sleeping more since rest affects the motivation and work capacity of people. people. To study the effect of exogenous changes on sleep, time zone variation in sunset times is typically examined.
Following this methodology, a study using cross-sectional time use data from the US estimates that a one-hour increase in weekly sleep time generates a 1.1% increase in both short-term and long-term labor income. long term. These results are very economically relevant since they suggest that the increase in income derived from an extra hour per week of sleep exceeds that produced by an additional year of formal education. But someone could say that in Europe labor markets operate differently (a greater presence of union negotiation, and hourly payment is less common). To test this effect and also control (unlike the American study cited) for the fact that the need for sleep is different for each person (using an estimate with individual fixed effects) and data from Germany, Sarah Fleche, Ricardo Pagan and myself estimate that, analogously to the American study, the amount of weekly sleep influences employment, productivity and income of individuals. As seen in Figure 1, we exploit as a natural experiment that increasing sun exposure by one hour reduces sleep hours by between 5 and 7 minutes depending on where each individual resides in Germany.
Figure 1: Suenorthoy sun exposure
Fountain: Costa-Font et al (2024)
Table 1 shows the results of an instrumental variables model with fixed effects where the different geographic exposure to sunlight is exploited as an instrument, and suggests that each additional hour of sleep per week increases the probability of employment by 1 .6 percentage points, and weekly income by 3.4 percentage points.
Table 1: Sleep effect estimatesnorthor in labor market outcomes
Fountain: Costa-Font et al (2024)
These estimates are also comparable to those of another work with British data where, with Sarah Fleche, they used the variations in the sleep interruptions of young children on the sleep duration of mothers (and fathers) to estimate the effect of sleep . in the economic performance of mothers. In the British study we found that increasing the average duration of a mother’s night’s sleep by half an hour increases her participation in the labor market by 2.5 percentage points, her working day by 7%, and family income by one. 4.9%; although her job satisfaction only increases very slightly (effects are also obtained with parents, but the effects are much smaller and less precise). We observe that these effects depend on the influence of maternal sleep on the selection of full-time versus part-time work. However, we found that increased work schedule flexibility among more experienced mothers partially mitigates the negative effects of sleep deprivation.
Effects of sleep on the economy
Some research has been dedicated to quantifying the overall effects of sleep on the economy. In fact, the The monetary costs of sleep deprivation on the economy are estimated at 1.9-2.9% of GDP in the US, 1.4-1.8% in the UK, 1.0-1.6 %. in Germany and 0.8-1.6% in Canada. However, this would be a conservative estimate since it does not take into account that Lack of sleep increases social tension and prosocial attitudes of the population.
Can the population be encouraged to sleep well?
Given the effect that sleep has on work outcomes and health, some organizations have considered designing incentives for sleep. For example, Aetna, a private health insurance company, offers $25 for every 20 nights in which people sleep 7 hours or more, with a limit of $500 a year., which is controlled with electrical devices. This effect is added to the fact that subsidizing digital information devices to track sleep can incentivize the time allocated to sleep. In fact, Evidence from a randomized control trial suggests that a subsidy to employees to purchase a wearable bracelet improves sleep and exercise significantly.
However, one of the possible criticisms of traditional economic approaches to sleep is that it is unclear to what extent individuals are aware of its effects on their economic activity, which limits the role of traditional economic incentives. On the other hand, this seems a fertile field to test behavioral inventives (‘behavioral incentives’), since many of the decisions about sleeping are automatic, forged by routines and not by conscious decisions, which opens the possibility of making multiple adjustments in the decision-making architecture.
From the public authorities, it is possible to make these effects of lack of sleep more evident with system interventions (called “S-Frame«). For example, it is possible to redesign television program schedules or work hours, as well as regulate work expectations in relation to answering emails and, in general, access to screens at night. Another issue that we could review are the so-called “cultural or social reference points” (how can it be that restaurants do not open the door for dinner before 9? Or that the News News continues to be at 9 after we integrate into the single market?). It should surprise no one that Spain is located together with Italy and some eastern countries in the queue of the distribution of hours of sleep in Europe.
We can also think of individual interventions (i-frame). Lack of sleep generates what in behavioral economics we call internalitiesThat is, it has negative consequences on our future well-being (future self). Since people are subject to the so-called “present biases” (present bias), we fall into the temptation of delaying bedtime guided by the immediate gains of finishing watching the favorite television series or the interesting conversation, ignoring the losses in productivity and motivation the next day. These behavioral biases point to the need for behavioral interventions (‘nudges’), as simple as a bedtime alarm (something like a casimirbut for adults), even a change in domestic lighting to automatically begin to generate melatonin, thereby increasing the feeling of sleep. If anyone is interested in 2023 we will publish a textbook on this topic with Caroline Rudisill and Tony Hockley where we explain more examples of this type of interventions.
A mode of speculation
I wouldn’t want to end without a somewhat speculative reflection: Could it be that perhaps social guidelines that limit hours of sleep can help explain? the low productivity of the Spanish economy that does not seem to improve over time? Intuitively, it seems likely that sleep deprivation is a dead end for the economy, but perhaps we could rethink “in-person work” especially in some environments (where working late is still perceived as a way to signal work commitment), or the idea that There is no social life without “intense nightlife” (“there is no glory without pain” as they say, the next morning). But perhaps it’s because I haven’t lived in Spain for more than 15 years, and then I tolerated the lack of sleep better.
