The National Economic Impact of Lack of Sleep - Ideas for Leaders
Idea #643

The National Economic Impact of Lack of Sleep

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The current epidemic of lack of sleep in today’s society is not only unhealthy and unproductive for the individual, but has a real economic impact at national levels.



People are not sleeping as long or as well as they used to. One third of Americans suffer from insufficient sleep, and sleep habits in many other countries are no better.

Insufficient sleep is a public health problem. In the United States, for example, there are clear links between lack of sleep and seven of the fifteen leading causes of death, including cardiovascular disease, diabetes, cerebrovascular disease and accidents.

There are also negative cognitive and productivity impacts from lack of sleep. We don’t think as clearly and we don’t work as well when we are tired. Insufficient sleep played a factor in a number of catastrophic accidents, from the Chernobyl nuclear accident at Chernobyl to the Exxon Valdez spill.

A recent RAND Europe study examined the effect of insufficient sleep at the macro-economic level — that is, how poor sleep habits might impact the economic results of a country.

The study first identified — using survey data from more than 62,000 individuals — the individual-level and workplace-related factors that led to insufficient sleep. At the individual-level, sleep was adversely impacted by body mass index (BMI) and habits such as smoking, consumption of sugary drinks and little physical activity. Financial concerns, gender and marital status also had an impact (e.g., men sleep less than women; single people sleep less than married people). In the workplace, unrealistic time pressures, irregular hours and commuting all reduce sleep.

The specific amount of sleep loss was not very high for each individual factor. For example, men slept 9 minutes per day less than women; financial stress caused a sleep loss of 10 minutes per day. However, the cumulative effect can be significant. A man under financial stress who commutes to work could lose an average of more than 26 minutes of sleep per day.

After identifying the factors associated with insufficient sleep, the Rand study examined the link between sleep and mortality. The result: those who sleep less than six hours a night are a 13% higher mortality risk than those who sleep seven to nine hours.

The next question was the impact on productivity. According to RAND's analysis (using absenteeism and presenteeism), those who slept less than six hours were 2.5% less productive than those who sleep seven to nine hours. Those who slept six to seven hours were 1.5% less productive.

Based on 250 working days per year, workers sleeping less than six hours per night lost six working days per year more than employees sleeping seven to nine hours. Workers sleeping six to seven hours per night lost 3.7 working days more per year.

Taking into account the U.S. working population and the percentage of workers with different sleep patterns, 1.23 million working days or 9.9 million working hours were lost in the United States due to lack of sleep. For Japan, the figures were 0.6 million working days and 4.8 million working hours lost. The UK and Germany each lost about 1.65 million working hours, while Canada only lost about .6 million working hours.

RAND used a bespoke macro-economic model to translate these lost working hours figures into economic impact. The model showed that the U.S. economy lost $411 billion in GDP (2.28% of the GDP) due to insufficient sleep. Discerning among different scenarios, the model showed that even if only workers who slept less than six hours started sleeping six to seven hours, America’s GDP would increase by $280 billion. Likewise, if workers who slept six to seven hours start sleeping seven to nine hours, GDP would increase $357 billion.

Similar results were found for the other four countries — UK, Japan, Germany and Canada — studied. Japan, for instance, lost 2.92% in GDP due to the lack of sufficient sleep. The figures for the UK, Germany and Canada were 1.85%, 1.56% and 1.35% respectively. As with the US, different sleep scenarios led to increases in GDP.

Lack of sufficient sleep is not only a health and wellness issue and a productivity issue. It is also a serious macro-economic issue at the national level.


The RAND study offered specific recommendations to combat poor sleep habits.

For individuals, RAND recommended setting a consistent wake-up time; limiting the use of electronic devices before bedtime (use of screens in the evening suppresses the level of melatonin, which is crucial for sleeping); avoiding cafeine, alcohol or nicotine close to bedtime; and exercising.

In the workplace, RAND recommended that employers recognize the importance of sleep and take active steps to promote sleep among their employees. A second recommendation was to put in place arrangements that support sleep-improving daily routines, such as stocking vending machines with healthy snacks or giving employees access to a gym. RAND's recommendations also included reducing the use of electronic devices after hours by, for example, limiting after-hours and out-of-office communications.

The RAND report also provided recommendations for public authorities, such as creating awareness programs around the issue.

Most people spend the greatest amount of their waking hours at work. Employers should take the lead in helping employees recognize the value of sleep, and how they can improve their sleep habits.



Why Sleep Matters: The Economic Costs of Insufficient Sleep. Marco Hafner, Martin Stepanek, Jirka Taylor, Wendy Troxel, Christian van Stolk. Rand Corporation Research Report RR-1791-VH (2016). 

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Idea conceived

February 20, 2016

Idea posted

Feb 2017
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