The Economics of Sleep, Part 2: A New Freakonomics Radio Episode

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Our latest Freakonomics Radio episode is “The Economics of Sleep, Part 2.” (You can subscribe to the podcast at iTunes or elsewhere, get the RSS feed, or listen via the media player above. You can also read the transcript, which includes credits for the music you’ll hear in the episode.)

Ph.D candidate Matthew Gibson found that the further west you live in a timezone, the less you make. (Photo: Jamie Mullins)

The economist Matthew Gibson found that people on the eastern edge of time zones make more money. (photo: Jamie Mullins)

In our previous episode, we primarily discussed the health implications of sleep. This time, we look at the economic impact. One big takeaway: if you sleep more, you will likely earn more money. How do we know this? Thanks to a fascinating paper by Matthew Gibson and Jeffrey Shrader, called “Time Use and Productivity: The Wage Returns to Sleep.” As Gibson tells us, economists have traditionally not paid too much attention to sleep — in part because good data were hard to come by:

GIBSON: What we really need is something like an experiment for sleep. Almost as though we go out in the United States and force people to sleep different amounts and then watch what the outcome is on their wages. And it turns out that ever since we’ve put time zones into place, we’ve basically been running just that sort of giant experiment on everyone in America.

So Gibson and Shrader looked at similar populations that lie at opposite ends of time zones — for instance, Huntsville, Alabama (on the eastern edge of the Central Time Zone), and Amarillo, Texas (on the western edge). Even though cities like this are on the same clock, the western city gets roughly an hour more of sunlight – which means that people there tend to go to bed later. But they have to wake up the same time as people in the eastern city – so, on average, they get less sleep. Gibson and Shrader could then look at the wage data in places like this to see how an extra dose of sleep affects earnings:

GIBSON: And we find that permanently increasing sleep by an hour per week for everybody in a city, increases the wages in that location by about 4.5%.

But there’s much more in this episode. Among the many voices you’ll hear:

+ Lauren Hale, a sleep researcher at Stony Brook University and a board member of the National Sleep Foundation. In last week’s episode, she told us she’d keep all computer screens out of her bedroom for a week and see how she slept. This week, she tells us the result.

+ Dan Hamermesh, a professor of economics at Royal Holloway University of London, emeritus professor at the University of Texas at Austin, and one of the first scholars to consider the economics of sleep:

HAMERMESH: Indeed, when this research was first written up in 1989, the headline was “Sleep, Why Bother? It Costs Too Much.” And the argument being there, that if you have other things to do with your time like make money, you’ll sleep less. The crucial point is sleep is not entirely biological, it responds to incentives. That’s the interesting economic point.

+ David Dinges, a professor of psychology and psychiatry at Penn, who tells us about his experimental research looking into the cumulative costs of sleep loss:

DINGES: The less sleep we gave people at night — so if went from seven or eight hours a night down to six or five — the more we got this cumulative rate of build-up of these deficits. They got worse every day. When the sleep got very short, down to four hours or three hours, they got worse every day very rapidly and very dramatically. So there was a dose-response function. The less sleep you got chronically, the more rapidly you deteriorated.

The economist Jens Bonke found that early birds to get paid more. (photo: Ernst Laursen)

The Danish economist Jens Bonke found that early birds make more money. (photo: Ernst Laursen)

+ Jens Bonke, an economist and senior researcher at the Rockwool Foundation in Copenhagen, whose research (gated) examines whether early birds really do get more worms. Short answer: yes!

Heather Schofield is doing experimental sleep research in India, where there are a lot of barriers to a good night’s sleep. (photo: Evgenia Eliseeva)

Heather Schofield is doing experimental sleep research in India, where there are a lot of barriers to a good night’s sleep.
(photo: Evgenia Eliseeva)

+ Heather Schofield, a postdoc fellow at the Center for Global Development, who is conducting experimental research (along with Frank Schillbach of MIT and Gautam Rao of Harvard) in India, where there are a lot of barriers to good sleep:

SCHOFIELD: Basically we’ll conduct a lottery and half the people in the study will be given things to help them sleep better at night. So we’ll give them a mat to sleep on, something like a camping mat, which makes the surface softer. We’ll give them a pillow so their neck isn’t as stiff. We’ll give them a light sheet and a fan to help keep the mosquitoes away. They’ll also get an eyeshade and ear-plugs to help deal with the light and the noise. In addition to that, we’ll also ask them to take a nap in the office every day. They have that choice whether or not they want to. But it will be a very pleasant environment where they can go where it’s cool and comfortable and take 20 or 30 minutes just to rest. Because there’s actually pretty good evidence just from work here in the U.S. and in other developed countries that short naps of 20 or 30 minutes can actually really improve your cognitive performance and your ability to kind of focus.

CEO of a health consultancy, Dan Pardi gives advice on how to get better sleep based on our individual metabolisms. (Photo: Christopher Kern)

Dan Pardi of Dan’s Plan has a lot of sleep advice. (photo: Christopher Kern)

+ Dan Pardi, CEO of the health consultancy Dan’s Plan, who has all kinds of advice about how we can all sleep a bit better, and in a style that suits our individual metabolisms.

What’s the Freakonomics prescription for a good night’s sleep? A good pair of earplugs and some Goldberg Variations, preferably played by Glenn Gould.


Oh, man that means that living in Alaska I'll make more money in the Winter than in the summer!


Huntsville has a very large NASA presence that Amarillo doesn't so I don't think they're really that similar. From experience here in Florida comparing salaries and living expenses between the Space Coast and Nature Coast can produce wildly different outcomes.


I wonder now that wearing around the clock monitoring devices like fit-bits is becoming more popular how these folks could add important opportunities for data collection for sleep researchers. I want to bet there are already researchers distributing these subjects to subjects for study. Maybe this is the part II of this story.

Dianne Parham

There is a book called "Dreamland: Adventures in the strange science of sleep" where a historian discovers that for most of history people have had two periods of sleep each night, with the time in between considered a time for creativity. The speculation is this notion of the 6-8 solid sleep is a modern invention that is highly promoted by the medical profession and pharmaceuticals (I think there is a good profit margin in convincing as many people as possible that they have sleep issues). It would be interesting if someone followed up on this very interesting idea since it appears what is normal about sleep is different than what the modern scientific community insists it is. Just a thought.


Similar to what Mollie posted, I wonder how the use of sleep cycle apps could benefit researchers. The one I personally use (Sleep Time by Azumio) has me log pre-bedtime activities like eating late, alcohol use, electronics before bed etc. and then measures my sleep quality by measuring movement. Another that I used in the past (MotionX 24/7: Sleeptracker) had options to record sound and heartrate as well, saving occurrences of snoring or other disruptive sounds. Personally, this seems to be a way to reduce survey bias and reach larger survey populations.


I wonder if an eastern edge city and a western edge city in a time zone would have significantly different traffic accident data. I know insurance companies calculate your premium based partially on your zip code, so that's another potential cost associated with lack of sleep.

Andy Kaufman

Looks like the mayor in Spain is a listener!


Hey, love the books and love this podcast...
However a little less music on these radio episodes would be nice. :)

Eric R.

It's not such a strange thing to expand your ear canal to seat the earplugs properly. I've been doing this for years when I'm using loud tools & equipment. However, I've learned that not only pulling the ear upward, but also outward from the head, and just ever so slightly back gets the optimum movement to let the earplugs fill the ear canal and block sound.

Glad to hear I'm not the only one stretching my ears to get the earplugs in!


This episode touches on workers in India who work in data-entry related to Captchas.

From the podcast:
"The reason [websites] use [Capchas] is because they're hard for computers to [read]. So they actually need a human to generate the correct answer so that they can check your answer when you enter it as well."

The researcher is either naive or doesn't want to admit that her research subjects are not engaged in legitimate work. They are actually the mechanical turk behind spam bots and hacking tools. A computer most certainly can generate a Captcha and verify your answer without a human involved. The ONLY reason you would involve a human in this process is if you want to circumvent the Captcha.

Spam bots and hacking tools can't easily decode the captchas, so they send it to humans like those mentioned in this story. The human fills it out, and the spam bot or hacking tool can continue its nefarious work.

Don't get me wrong, the episode is still enjoyable. It's just surprising that such an inaccuracy would have made it to production.

Perhaps a Freakonomics on Internet crime would be interesting. It could cover both the amazing amount of money made from Ransomware viruses (that encrypt your files and ask for money to restore them to you), the money spent by states on cyber-warfare, the money spent on consumers to attempt to protect themselves, and the cost of breaches when they happen.


Grace Armes

Last year I downloaded a free app called "f.lux", which changes the colors on your computer according to the time of day, so that it uses blue light in the daylight hours to mimic the sun, and takes out the blue light in the evening and night, so that the detrimental effects of computer use before sleeping are reduced. (It is hard to tell if it is working because I have small children and so am eternally exhausted, but it seems soothing.)


Where can I find the "high-end earplugs?" What brand are they?

David Haile

Howard Leight Max Lite ear plugs (the green ones) are $20 for a 200 pair box.

I've tried lots of ear plugs over the years (I'm 55). I also paid $140 for custom-molded ear plugs, used them for 6 months, and reordered the right ear plug to adjust the comfort a bit. I used them all the time. That was before I discovered the Howard Leight Max Lite's. For ultimate comfort, snip the top of the ear plug off so it doesn't protrude from your ear. Put them in correctly and you can sleep on them and won't notice them at all. You'll have to learn for yourself the right combination of pressure to seal out noise and at the same time be extremely comfortable.


Arguments about sleep and time zones remind me of the strange project of unifying the time zones in Nunavut (a territory in the Canadian arctic). Nunavut has a tiny population of 31,000 and spread across 3 time zones. That makes governance complicated. When the territory gained independence in 1999, they merged the 3 zones into 1. Predictably, there was blowback. Some municipalities revolted (including the capital), and took votes to stay on the old time zone. In the arctic, daylight is precious in the winter months, and people did not take kindly to any moves that would compromise it. The plan was abandoned in 2001. They're back on 3 time zones.

A contemporary local news item:

And the Wikipedia article:


This seems rather strange, as I'd imagine most people there live/work outdoors, and (as I do) arrange their schedules by the sun rather than the clock.


I absolutely loved these two series about sleep. You guys are probably inundated with ideas for future shows, but I would love to here one about driving. Is there a correlation between speeding and income? Does the kind of car your drive affect your chances of getting cut off? You guys can figure it out!


Sorry, paying people to double check captchas is nonsense - the software generates a string and mangles it afterwards, so it doesn't need to be told what the original is.

A more likely scenario is that you've come across some sort of spam farm where spammers are paying to have captchas 'cracked' so they can leave spam on blogs and the like.


Can you make a trifecta!! Economics of sleep part 3? Healthcare costs (medications as one aspect) and what about the people who can fall asleep but wake up and can't fall back asleep. I used to take sleep for granted, never requiring a dark room, noise didn't matter, feel asleep within 5 mins of hitting the pillow and didn't wake up until my alarm went off. Now, for the last year, I wake up at 2, 3, 5 am and just lay there unable to fall back asleep. Over the year I have tried many methods and none have worked and I know the health effect (headaches, cognitive activity, short temper, weight gain , etc). I even listen sometimes to freakonomics because if I can't sleep and toss and turn, I figure I might as well relax and not wake up my partner. What causes us to wake up during sleep in a completely quiet room- I don't anyone to blame but my body.

David Haile

Hah! Confirmed! I used to occasionally sneak out of work in the afternoon and take a nap in my car. I felt like it was the only way I could regain focus for the rest of the day. Without the nap I was worthless.

Dallas Holladay

The negative aspects of sleep deprivation are particularly interesting when considering occupations that function 24 hours. For example, most physician specialties can expect to be woken in the middle of the night with emergencies that may require immediate attention (such as emergent surgery). Emergency rooms are staffed 24x7, depending on the size of the department the ED doc may be working a 24 hour shift, or, be working a sleep deprived night shift. A little unnerving when we know sleep deprivation causes decreased reaction times and critical thinking skills!