Can we sleep our way to success?
Illustration: Lorenza Walker: Source: Wikipedia
We all know that sleep is good for our bodies – that it helps us heal and refresh ourselves, restoring our immune, nervous, and muscle systems. But can sleep be good for our finances, too? Because getting enough rest helps us concentrate and interact more positively with others, sleep could improve our wages. On the other hand, you obviously can’t work while you’re sleeping. How does sleep impact our earnings?
It’s hard to estimate the income effects of getting more sleep. As your income goes up, the opportunity cost of sleep goes up as more. Your time is worth more. But a lack of sleep clearly has direct economic costs: doctors make more mistakes, students do worse on tests, folks running cars or trains or planes fail to pick up important signals. A few years ago, two Northwest pilots overshot the Minneapolis – St. Paul Airport by 150 miles because they were probably dozing in the cockpit. They lost their pilot licenses.
Some researchers looked at a large set of sleep diaries from the US. They evaluated sleep time and the local sunset across multiple time zones.
Sunset time in the Spring. Source: UCSD
They found that a one-hour increase in average sleep increases wages by about 16% – the same as an additional year of school. They also found that the optimal amount of sleep is around 9 hours. This is more than the average sleep they found in the diaries – 8.3 hours – and a lot more than the 7 hours per night minimum that most medical researchers believe is needed for our bodies.
Sleep isn’t just a curiosity. It’s a vital part of our economic, medical, and personal lives. We have to weigh the trade-offs between work, health, leisure, and other demands on our time. But if we want to improve our situation, we might start by getting a little more rest.
Douglas R. Tengdin, CFA