Isamu Yamamoto: Sleep and Economics

2023/12/25

The sleeping hours of Japanese people are the shortest among developed nations. According to OECD statistics (Gender Data Portal 2022), while people in the United States and European countries sleep an average of about 8 hours and 30 minutes per day, Japanese people sleep about 7 hours and 20 minutes, which is more than an hour shorter. Japan falls behind other countries not only in sleep duration but also in sleep quality. According to a survey conducted by Philips in 2020 (World Sleep Survey 2020), Japan's sleep satisfaction ranked last among 13 countries worldwide.

What kind of impact does such poor sleep have? First, at the individual level, many studies in the fields of medical sciences and industrial health point out that lack of sleep leads to decreased work efficiency. For example, experimental results have been reported showing that working for 17 consecutive hours without sleep reduces work efficiency to the same level as working while intoxicated at a level equivalent to drunk driving.

Next, at the organizational level, according to empirical research I conducted at the Nikkei Smart Work Management Study Group (Nikkei Inc.) using data from Japanese listed companies and business professionals working for them, companies where employees' sleep status (sleep duration and quality) is poor on average tend to have lower profit margins. In recent years, "Health and Productivity Management"—the idea of increasing corporate value through initiatives to improve employee health—has been attracting attention, and it can be said that improving the sleep of individual employees is exactly what leads to Health and Productivity Management.

Furthermore, even at the national level, according to estimates released by the Rand Research Centers and Institutes in 2016, sleep deprivation causes an economic loss of approximately 15 trillion yen in Japan, equivalent to 2.9% of GDP. Additionally, IMF analysis shows a correlation where countries with shorter sleep durations tend to have lower GDP per capita.

As described, failing to get high-quality sleep not only worsens work efficiency at the individual level but also leads to a decline in corporate performance at the organizational level, which in turn can result in significant economic losses at the national level. Sleep is often treated as a personal issue, but it is closely linked to the economy. It can be pointed out that securing appropriate sleep duration and improving sleep quality not only improves individual health and well-being but also leads to improved productivity, business performance, and the realization of economic growth.

So, what is necessary to ensure high-quality sleep? According to the 2016 report by the Rand Research Centers and Institutes, factors leading to sleep deprivation include lifestyle factors such as obesity, smoking, and lack of exercise; health factors such as mental health disorders, chronic diseases, and musculoskeletal disorders; personal factors such as financial problems, caregiving, and childcare; sociodemographic factors such as income, age, and marital status; and psychological/work factors such as work pressure, lack of discretion, non-standard work, and long commute times.

Among these, work factors are particularly noteworthy in Japan. This is because, although long working hours are being corrected through work-style reforms and other measures, working hours are still longer than in other countries.

Looking at the trends in sleep duration in the "Survey on Time Use and Leisure Activities" (Ministry of Internal Affairs and Communications), weekday sleep duration, which had consistently decreased since the start of statistics in 1976, reversed in 2020 and increased by about 20 minutes on average.

Factors for this include the reduction in working and commuting hours due to work-style reforms and remote work during the COVID-19 pandemic. For example, weekday working hours show a decrease of about 20 minutes, which is exactly the same amount of time that sleep duration increased. In other words, if the way we work changes, there is a possibility that sleep duration can be secured.

My analysis at the Nikkei Smart Work Management Study Group also clarifies this point. For example, people with good sleep status are more likely to be those whose companies have shorter average working hours, who have shorter overtime and commute times, who take more paid leave days, and who work from home. When estimating the relationship between overtime hours and sleep duration using econometric causal inference, it was found that if overtime hours decrease by 10 hours per month, sleep duration increases by about 4 hours per month.

Furthermore, various human resource measures implemented by companies are also related to employee sleep. For example, people working in workplaces that utilize a "work-interval system"—which requires a certain amount of interval time between the time work ends and the time work begins the next day—are better able to secure high-quality sleep. In addition, sleep duration and quality are better in workplaces that implement initiatives such as flexible working styles in terms of location and time, the spread of work-from-home systems, optimization of working hours, fair and objective personnel evaluations, ensuring psychological safety, promoting understanding of "purpose" (the company's social reason for existence), ensuring good communication, and clarifying work authority and responsibility.

Under the 2019 Work Style Reform Related Acts, the introduction of the work-interval system became a mandatory effort for companies. However, the introduction rate is low, at about 5% for small and medium-sized enterprises and about 15% even for large corporations. Furthermore, the various human resource measures mentioned above also have low adoption rates, particularly among small and medium-sized enterprises. Conversely, if work-style reforms progress and human resource-related measures such as the work-interval system become widespread, there is a significant possibility that the sleep of Japanese business professionals will improve as a result. Corporate management that is conscious of sleep is desired.