The later the sun sets, the lower the productivity of a place. A short article in The Economist about problems with Spain’s work hours suggests that one of Spain’s economic problems stems from the fact that it’s in the wrong time zone. If Spain were in the “right” time zone, according to GMT standards, its productivity would increase.

Researchers in the U.S. and elsewhere have studied places where, in a single time zone, there are dramatically different sunrise and sunset times. China is an interesting example. The whole country, big as it is, works on unified Beijing time. On the vernal equinox, sunrise can be as early as 3:43 a.m. or as late as 6:27 a.m., depending on which side of the country you’re on (Gibson & Schrader, 2015). The sun might set as early as 7:27 p.m. or as late as 9:56 p.m.

If China were structured by GMT norms, it would span three time zones, just as the continental United States does.

But who cares what time the sun sets or rises?

As it turns out, businesses should care.

Where the sun sets later, people generally go to bed later. However, they still wake up at the same time because businesses and schools start at a time determined by the social clock, not by the rising and setting of the sun. The hour we start school or work doesn’t change throughout the year, unlike the time of sunrise. A work day in the U.S. typically starts around 8 or 9 in the morning. If you usually get up at 6:30 to give yourself enough time to get ready and commute to your job, you’re not going to sleep in later in the summer just because you tend to stay up later than you do in winter.

Indeed, data confirm that people don’t change what time they get up even when they do change what time they go to bed. And a later sunset is correlated with later bedtimes.

So why do time zones affect productivity?

When people sleep less, they tend to earn less. Rosekind et al. (2010) estimated economic losses due to insufficient sleep to be as high as $3,156 less per employee per year. Gibson and Shrader (2015) say it’s to the tune of 0.5 percent on average in the short term, and 4.5 percent on average in the long term (Gibson & Shrader, 2015).

The cause and effect relationship between not sleeping enough and having less money is probably not so direct, but other studies tease it out. Losing a mere 30 minutes of sleep per night, consistently, is enough to cause cumulative sleep deprivation, and cumulative sleep deprivation results in lower cognitive abilities. Lower cognitive abilities are associated with lower economic outcomes, financial decisions, and economic development (Giuntella et al., citing McArdle et al., 2011; Banks and Oldfield, 2007; and Hanushek and Woessmann, 2008).

The economy of Spain isn’t going to change significantly by shifting the clock a few hours this way or that. It might help put Spaniards in the office at times that overlap more with their European counterparts, but it doesn’t solve some of the other cultural issues that inhibit productivity, such as long mid-day siestas, which the authors of the article in The Economist acknowledge. But adjusting the clock to better align with the sun could be a starting point.

References

Banks, J. & Oldfield, Z. (2007). Understanding pensions: cognitive function, numerical ability and retirement saving. Fiscal Studies 28 (2): 143–170.

Gibson, M. & Schrader, J. (2015). Time Use and Productivity: The Wage Returns to Sleep. [working paper, July 16, 2015]

Giuntella, O., Han, W., & Mazzonna, F. (2016). Circadian Rhythms, Sleep and Cognitive Skills. Evidence From an Unsleeping Giant. Discussion Paper No. 9774, IZA (The Institute for the Study of Labor, Bonn, Germany).

Hanushek, E. A. & Woessmann, L. (2008). The role of cognitive skills in economic development. Journal of Economic Literature: 607–668.

McArdle, J. J., Smith, J. P., & Willis, R. (2011). Cognition and economic outcomes in the health and retirement survey. In: Explorations in the Economics of Aging. University of Chicago Press: 209–233.

Rosekind, M., Gregory, K., Mallis, M., Brandt, S., Seal, B., & Lerner, D. (2010). The Cost of Poor Sleep: Workplace Productivity Loss and Associated Costs. Journal Of Occupational And Environmental Medicine, 52(1), 91-98. doi:10.1097/jom.0b013e3181c78c30.

Image by Dennis S. Hurd, CC.