How Daylight Saving Time clock changes upend the economy
On Sunday, Nov. 5, most of the U.S. will dial back their clocks an hour in order to “fall back” to standard time as part of the nation’s semi-annual ritual of changing the time.
While much of the analysis surrounding America’s twice-a-year clock changes covers the health effects of Daylight Saving Time (DST) — which includes a higher risk of cardiac issues amid disrupted sleep schedules — the economic toll has not received as much focus.
However, research indicates that changing the clock twice a year has adverse impacts on the money side of things that are very real, and the evidence is growing.
A study published last year by researchers from several business schools found that investors and capital market participants are slower to respond to accounting reports in the week after we “spring forward” — which falls smack in the middle of earnings season.
“These results are strongest among firms with investors who are more likely to be trading on earnings news and among firms with a less sophisticated investor base,” the authors wrote. “Further analysis reveals that our main results are driven by muted reactions to positive earnings surprises, consistent with cognitive impairment and investor pessimism jointly underlying the diminished market response to earnings news.”
Another set of business school researchers found that on the Monday following DST, there is a rise in workplace injuries.
Not only that, the injuries were more severe (measured by days of work lost due to the injuries), which surged by 67%.
A subsequent study discovered that on the Monday after DST there is a sharp uptick in “cyberloafing,” the practice of employees scrolling the internet for non-work-related activities.
There is also evidence the time change leads to an increase in heart attacks, strokes, and depression, leading to an increase in healthcare costs.
Even commuting becomes more treacherous and expensive, given that the change to DST has been linked to spikes in car accidents.
Additionally, while DST has been touted as an energy-saving move, a 2008 study by the National Bureau of Economic Research found that DST actually led to a 1% increase in residential energy consumption by consumers in Indiana — costing households in the state an extra $9 million on their electric bills and resulting in another estimated $1.7 to $5.5 million in “social costs of increased pollution emissions.”
The actual dollar amount of the collective impact of these factors is tough to pin down, but a Chmura Economics & Analytics study from a decade ago found that the springtime change cost the U.S. economy more than $433 million.
As of 2021, Manhattan Institute senior fellow Allison Schrager reported that DST cost the airline industry alone hundreds of millions of dollars.
Despite evidence indicating changing the clocks has negative impacts on Americans’ health and the economy, the latest effort in Congress to end the practice appears stalled.
Sen. Marco Rubio, R-Fla., has been leading a bipartisan coalition for years to make what is currently DST, the new standard time.
His “Sunshine Protection Act” eliminating the time change passed the upper chamber by unanimous consent last year, but the House never took it up that Congress.
Rubio reintroduced his legislation in March, backed by several senators from both sides of the political aisle, and Rep. Vern Buchanan, R-Fla., filed a companion bill in the House.
Both bills remain in committees.
