What research says about sleep and earnings

What we know

You have probably heard that people who sleep well do better at work. The trouble is that most studies simply compare people who sleep a lot with people who do not. Those groups differ in many ways. People who are healthier, or who have more free time, may also be the ones who sleep more. So a plain comparison cannot tell us whether sleep itself makes the difference.

Two US economists, Matthew Gibson and Jeffrey Shrader, found a clever way around this problem (2018). Using the American Time Use Survey, they looked at sunset time. Within a single time zone, the sun sets later at the western edge than at the eastern edge. People in late-sunset areas tend to go to bed later, but work still starts at the same clock time, so they end up sleeping less. Sunset time has nothing to do with a person’s effort or talent. That lets researchers estimate how earnings change when sleep changes, while filtering out much of the “who chooses to sleep more” problem.

Their estimate: when average weekly sleep in an area rises by one hour, earnings are 1.1% higher in the short run and 5% higher in the long run. It is one of the few studies that links sleep and income with a design close to cause and effect.

The second piece of evidence is a 2016 report from the RAND Corporation that estimated the economic cost of insufficient sleep in five countries: the US, the UK, Germany, Japan and Canada. As a share of the economy, Japan’s loss was the largest: up to 138 billion dollars a year, or 2.92% of GDP. The US lost 411 billion dollars (2.28% of GDP), Germany 60 billion (1.56%) and the UK 50 billion (1.86%). In Japan, about 600,000 working days a year were estimated to be lost to poor sleep.

How to read it

Gibson and Shrader’s number describes area averages. It does not mean that if you personally sleep one more hour a week, your own pay goes up by 5%. It means that areas where people sleep more, on average, have higher average earnings. It is not a forecast for any one person.

The data also come from US workers. We do not know whether the effect would be the same size under Japanese or Korean pay systems, and we have not found a Japanese study that uses the same method.

RAND’s figures are model-based estimates, not measured losses. They are best read as a rough sign that some societies, Japan among them, may pay a high price for short sleep. The same report found that people sleeping under six hours had a 13% higher risk of death than people sleeping seven to nine hours.

More sleep is not always better, though. A large Japanese smartphone dataset from the University of Tsukuba (2025) linked both very short and very long sleep to lower productivity at work. That is why the app says “about 7 hours” rather than “7 hours or more”.

A small step for today

• Log “slept about 7 hours”. Start by knowing how much you actually sleep.
• Go to bed 30 minutes earlier. The sunset study shows how a later bedtime eats into sleep when wake-up time is fixed. Your wake-up time is hard to move, so adjust the bedtime side.
• Put your phone down an hour before bed. A controlled experiment found that reading on a glowing screen before bed delayed falling asleep.

If you have trouble sleeping for weeks, or feel very sleepy during the day, talk to a doctor before trying to fix it with habits alone.

Sources

• [B1] Gibson & Shrader (2018) Time Use and Labor Productivity: The Returns to Sleep. Review of Economics and Statistics.
• [B2] Hafner et al. (2016) Why sleep matters — the economic costs of insufficient sleep: A cross-country comparative analysis. RAND Corporation.
• [B3] Seol, Iwagami & Yanagisawa (2025) Association of Sleep Patterns Assessed by a Smartphone Application with Work Productivity Loss Among Japanese Employees. npj Digital Medicine.
• [B4] Chang et al. (2015) Evening use of light-emitting eReaders negatively affects sleep, circadian timing, and next-morning alertness. PNAS.