The Economic Cost of Sleep Deprivation
“Money never sleeps,” says Gordon Gekko in the film Wall Street. Technically correct. But there’s a related point he never mentions: never sleeping costs money.
This idea seems to go against the ideal of working more and sleeping less that’s prevalent in our productivity-obsessed culture. Fortune 500 CEOs and high-profile politicians brag about how little they sleep each night. Bill Clinton sleeps five hours a night? Well, the CEO of PepsiCo only sleeps four hours!
Others have pointed out that it’s a little silly for business leaders and politicians to try and one up each other with their enthusiasm for engaging in a lifestyle habit shown to impair judgment, including by making people less discriminating about whose advice they accept. Arianna Huffington has become one of the most high-profile advocates of sleep (who ever thought that a basic, biologically necessary function would need an advocate?), giving a TED Talk and writing a book.
As it turns out, the costs of not sleeping go beyond the risks to individual health and wellbeing. They ripple out into the economy. Now, a group of medical professionals and economists from Australia have tried to quantify how much sleep deprivation costs the economy in a year.
In their study, they estimated what the effects of sleep deprivation meant for Australia’s economy in the 2016-2017 fiscal year. Their figures are specific to Australia, so it’s worth noting that in an economic giant like the United States, the numbers would likely be even higher (the US’s GDP is over 15 times Australia’s).
But even for Australia, the numbers are pretty eye-catching.
For example, the researchers estimate that decreased productivity due to sleep deprivation resulted in the economy taking a hit of more than $12 billion during the year being studied. This included $5.22 billion in lowered employment, $1.73 billion in people skipping work, $4.63 billion in people showing up to work but not being able to function well, and $610 million due to people dying early.
Then there are the health costs that arise from sleep deprivation, including over $1 billion spent treating conditions associated with sleep deprivation. Accidents resulted in the loss of a further $2.48 billion, and economic inefficiency cost $1.56 billion.
All told, the researchers estimated that the financial cost of sleep deprivation added up to a cool $17.88 billion, which they pointed out was about 1.55 percent of Australia’s total GDP. From an economic standpoint, sleep deprivation is something we should be, well, losing sleep over.
Of course, there are plenty of good reasons to get a full night’s sleep that have nothing to do with economics. But these numbers show that the idea of sacrificing sleep for the sake of productivity is one that’s backfiring. Functioning on no sleep doesn’t make a country more economically competitive – it probably just results in that country losing money.