ECONOMICS OF SLEEP
In a world that glorifies the hustle, sleep has often been cast aside, it is an afterthought for those who can 'afford it.' But what if sleep isn't a luxury, but an economic driver?
What if those lost hours under the covers are actually costing us billions in productivity and healthcare? Let's take a look and try to understand.
Sleep as an economic driver
Sleep isn't just about rest—it's about rejuvenation, efficiency, and ultimately, economic output.
Countries with healthier sleep patterns tend to report higher workplace productivity and lower healthcare costs. For instance, workers who regularly get seven to eight hours of sleep contribute to a healthier workforce, leading to fewer sick days, better decision-making, and increased innovation. In a world driven by productivity metrics, sleep is proving to be one of the most undervalued resources.
According to some research evidence, the proportion of people sleeping less than the recommended hours of sleep is rising and associated with lifestyle factors related to a modern 24/7 society, such as psychosocial stress, alcohol consumption, smoking, lack of physical activity and excessive electronic media use, among others.
Cost of sleep deprivation at work
Workers who experience poor sleep are more likely to make costly mistakes, experience burnout, and even create hazardous work environments. The subtle thief that sleep deprivation is, doesn't just lead to inefficiencies—it directly impacts GDP growth by reducing a nation’s workforce capacity.
Take Japan, where “inemuri,” or sleeping at work, is not only accepted but seen as a sign of dedication.
Inemuri is not only accepted in many workplaces, but it is also seen as a sign of dedication and hard work. Employees who doze off at their desks or during meetings are often viewed as having worked themselves to the point of exhaustion, which can signify loyalty and commitment to their job. This cultural norm reflects Japan's intense work culture, where long hours and relentless dedication are often expected, and rest—even in small increments during the workday—is considered a way to recharge without fully disengaging from one’s duties.
In Spain, the concept of a “siesta”—a midday nap—is seen as vital to refresh workers for the second half of the day. Countries like Sweden have also embraced ‘fika’ breaks, which while not explicitly for sleep, emphasize rest and relaxation as essential to work-life balance.
Contrast this with India and maybe even the rest of the world, where nodding off at your desk might land you a reprimand. Workers are expected to stay alert and productive during working hours, with rest confined to personal time outside of the office. The pressure to maintain constant productivity can often lead to a culture where employees suppress their need for rest, which may result in burnout or long-term health issues.
This difference hints at the broader economic machinery in these cultures, where rest is either viewed as a functional part of productivity or as an interruption to it.
The rise of sleep technology: A billion-dollar industry
In recent years, sleep has evolved from a biological necessity to a lucrative market, fueled by growing public awareness of its importance.
From AI-powered sleep trackers to white noise machines, the sleep-tech industry has morphed into a multi-billion-dollar space.
Devices like the Oura Ring and Fitbit Sense monitor sleep patterns, heart rate, and REM cycles, providing real-time analysis and suggestions to improve sleep quality. But it’s not just wearables driving this growth.
Smart mattresses, such as those developed by Eight Sleep, adjust temperature throughout the night to enhance rest, turning sleep into a hyper-personalized experience.
These innovations offer more than comfort—they also present a market opportunity to both individuals and corporations investing in employee well-being.
There are apps like Calm and Headspace that have successfully monetized sleep optimisation through guided meditation and sleep soundscapes. These platforms are capitalising on the increasing public awareness of sleep’s importance, proving that a good night's rest is more than just a marketing gimmick.
The global sleep-tech wave hasn’t bypassed India. In fact, India’s sleep market is rapidly catching up, driven by a growing middle class that’s increasingly concerned with health and wellness. As more Indians recognize the importance of sleep for mental and physical health, demand for sleep products and technologies is on the rise.
Apps like Wakefit, an Indian mattress and sleep solution company, have captured this market by providing innovative products tailored for Indian consumers. Wakefit offers not just mattresses but sleep-related technology like sleep trackers and sleep hygiene tips, integrating data-driven insights to help users optimize their rest.
Another Indian player, SleepyCat, has emerged as a key disruptor in the mattress-in-a-box market, combining affordability with innovation. The company’s mattresses include cooling technology and ergonomic designs that appeal to tech-savvy, sleep-conscious consumers.
Digital platforms like Cure.fit are also expanding into the sleep space, offering guided meditation and sleep coaching services to help users achieve better rest. Much like the global apps Calm and Headspace, these platforms are capitalizing on the wellness boom in India, where the concept of holistic health is gaining traction.
Adverse effects of strained sleep
The pressures of modern technology are putting sleep under strain, as people increasingly sacrifice rest to make time for work, social activities, and family obligations. Advances in communication, particularly those that span multiple time zones, along with the rise of online information, entertainment platforms, and social media, all contribute to this trend. Alongside these developments, lifestyle changes have led to more common sleep disorders such as insomnia and obstructive sleep apnea (OSA), driven by factors like stress and sedentary behavior.
Community surveys reflect a growing issue with insufficient sleep. Earlier studies found that between 20% and 30% of people in Western countries regularly experienced inadequate sleep. However, recent surveys suggest that in Australia, this percentage has increased to between 33% and 45%, depending on the metrics used. This trend appears consistent in other nations with similar demographics.
Sleep plays a critical role in recovery, memory processing, emotional regulation, and overall functioning. When sleep is insufficient, cognitive abilities, motor skills, and mood suffer. This is particularly apparent in the medical field, where sleep deprivation leads to reduced focus, motivation, problem-solving abilities, and communication, along with memory lapses, irritability, slower response times, and diminished empathy.
Additionally, short sleep duration negatively impacts physical health, raising the risks of heart disease, stroke, high blood pressure, obesity, diabetes, depression, and even early mortality. Research shows that even brief periods of sleep loss can impair cognitive performance, memory, and mood, while also increasing insulin resistance and inflammation.
The economic consequences of inadequate sleep are considerable, affecting health, safety, and productivity.
While the financial costs of sleep disorders have been previously documented, the broader impact of short sleep duration and poor sleep habits also warrants attention. A thorough economic analysis is necessary to assess the full range of costs associated with inadequate sleep, including both health and safety issues and the resulting loss in productivity. This evaluation can help determine whether current or increased spending to address sleep issues is justified. Although the human costs of poor sleep are well recognized, economic data often drive political and administrative decisions. With limited resources, sleep health advocates must demonstrate how the costs of inadequate sleep compare to other societal and health challenges.
This study sought to conduct such an economic evaluation in Australia for the 2016-2017 fiscal year, estimating both the financial impact of inadequate sleep and its broader implications for quality of life.
A comprehensive review of relevant literature was conducted to assess the prevalence of various forms of inadequate sleep and their economic impacts during the 2016-2017 fiscal year.
The focus was on Australian data, which was used to estimate the total costs associated with two main areas:
(1) direct financial costs, including healthcare for sleep-related conditions, productivity losses, informal caregiving, nonmedical expenses from accidents, and economic inefficiencies due to welfare payments and lost tax revenue; and
(2) indirect non-financial costs, such as reduced quality of life.
The economic burden of inadequate sleep on health and accident outcomes was determined using the population attributable fraction (PAF) method, which calculates the proportion of these costs based on the prevalence of sleep issues and their related outcomes, along with the odds ratios that link them.
Data on the prevalence of symptoms related to inadequate sleep, including sleep disorders and excessive daytime sleepiness (EDS), was primarily drawn from a national survey on sleep health in Australian adults. Additional sources were used to supplement the survey data. Inadequate sleep was defined as difficulties with falling asleep, staying asleep, or achieving quality sleep, coupled with impaired alertness during the day, occurring several times a week or more. The survey also examined potential causes of inadequate sleep, including specific sleep disorders.
The survey assessed three main sleep disorders:
(1) obstructive sleep apnea (OSA), identified by a prior diagnosis or by reported symptoms such as breathing pauses and loud snoring;
(2) insomnia, diagnosed based on criteria that include difficulty with sleep initiation or maintenance along with daytime consequences such as sleepiness, fatigue, irritability, or moodiness, occurring at least three times a week; and
(3) restless legs syndrome, reported as occurring three or more nights a week.
These prevalence estimates were used in the analysis and adjusted where necessary based on additional data.
The study aimed to evaluate the economic impact of inadequate sleep in all its forms, recognizing that different sleep issues have varying effects on health and daytime performance. To simplify the analysis, sleep-related problems were divided into three categories:
(1) EDS associated with clinical sleep disorders (EDS-SD);
(2) EDS arising from non-clinical sleep disorders (EDS-Other); and
(3) regular, near-daily insufficient sleep, defined by an Epworth Sleepiness Score (ESS) of 10 or below (Insufficient Sleep).
EDS was measured using the ESS, with a score above 10 indicating excessive daytime sleepiness. The ESS is widely used in both research and clinical settings and has proven to be a useful tool for assessing the economic impact of sleepiness on daily functioning.
The proportion of individuals with EDS-SD was estimated using the PAF method. The necessary odds ratio (the ratio of those with EDS and a sleep disorder compared to those with EDS but no sleep disorder) was obtained from data shared by other researchers. While it is recognized that the risk of EDS varies across different sleep disorders, and that additional sleep issues beyond the major three can also cause EDS, these other conditions have a limited overall economic impact due to their lower prevalence.
For those with EDS-SD, it was assumed that their EDS was primarily caused by the sleep disorder. Additionally, inadequate sleep in this group may contribute to other health problems, such as depression and obesity. Since these conditions can be linked to sleep deprivation, a portion of their associated costs is included in the overall economic impact of inadequate sleep.
The remaining participants with EDS, who did not have a clinical sleep disorder, were categorized as “EDS-Other.” This group includes individuals with EDS resulting from various factors, such as poor sleep habits, jet lag, environmental disturbances, or underlying medical conditions. In these cases, it is assumed that EDS is caused by the secondary condition rather than the other way around. However, some conditions, such as injuries and depression, have been linked to EDS, and the costs associated with these conditions are also factored into the analysis.
Lastly, the proportion of individuals experiencing “Insufficient Sleep” was determined by identifying those who reported inadequate sleep but did not meet the criteria for EDS. In most cases, this form of sleep insufficiency is likely due to behavioral factors.
While individuals with sleep disorders and subjective sleepiness but no EDS were included in the “Insufficient Sleep” category, those with sleep disorders who did not experience EDS or subjective sleepiness were excluded from the analysis.
Sleep Deprivation and the Economic Disadvantage
The link between low income and poor sleep quality is stark. Low-income workers often juggle multiple jobs or work irregular hours, which inevitably leads to chronic sleep deprivation. When you're tired, you're less productive; when you're less productive, your chances of upward mobility shrink.
This chronic lack of sleep has a direct impact on productivity and overall job performance.
For those already in low-paying jobs, poor performance can lead to reduced hours, fewer promotions, and even job loss, thereby further perpetuating their economic struggle. Without proper rest, workers find themselves trapped in a cycle where their ability to improve their financial situation is compromised by the very conditions that demand they work more. Moreover, poor sleep can also lead to serious health problems, such as heart disease, diabetes, and depression, which disproportionately affect low-income populations.
As a result, sleep becomes more than just a personal health concern—it is a social justice issue, reflective of broader economic inequalities.
As long as sleep remains a luxury that the economically disadvantaged cannot afford, it will continue to widen the gap between those who can perform at their best and those who are left fighting exhaustion just to survive.
The Commodification of Sleep: Ethical Concerns
With sleep becoming big business, an ethical question arises: Is sleep being commodified?
There’s a growing concern that by turning rest into a purchasable service, we risk creating a divide where only the wealthy can afford optimal sleep conditions, while others are left to suffer. The rise of products like sleep-optimising mattresses and high-end sleep coaching services shows how the marketplace is monetizing a basic human need.
Can we truly put a price on sleep, or are we at risk of turning rest into just another luxury?
Are we creating a world where only the wealthy can afford optimal sleep conditions, while lower-income individuals—who may already be struggling with sleep deprivation—are left behind? One of the primary concerns is that sleep, once free and accessible to all, is becoming something that can be bought—by those who can afford it.
This potential divide underscores a troubling issue: access to quality sleep may become yet another reflection of broader economic inequality.
This approach of commodification of sleep, runs the risk of reducing sleep to yet another consumerist goal, where individuals feel pressured to buy their way to a better night’s rest, rather than prioritizing natural habits and lifestyle changes.
Dr. Matthew Walker, author of Why We Sleep, warns that the lack of sleep in our society is akin to a “global sleep loss epidemic.”
Sara Mednick, PhD, a cognitive neuroscientist at UC Irvine and author of The Power of the Downstate and Take a Nap! Change Your Life, states, “Sleep should be considered a pillar of health, much like diet and exercise”.
Conclusion
At the heart of this ethical debate is the question: can we truly put a price on sleep, or are we risking a world where rest becomes a privilege rather than a right?
While sleep technology has undoubtedly offered valuable solutions to many, it also raises the uncomfortable reality that the marketplace is transforming sleep into a product—one that not everyone can afford. The challenge moving forward will be finding a balance between innovation in sleep technology and ensuring that sleep remains an equitable and accessible resource for all.
So the next time you think about skimping on sleep, consider this—your future productivity and the economy might just depend on those extra zzz’s.
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