On Sunday, November 5, most people in the United States will set their clocks back an hour to “fall back” to standard time as part of the semi-annual ritual of the time change.
While much of the analysis surrounding America’s twice-yearly time change covers the health effects of daylight saving time (DST) – which brings with it a higher risk of heart problems if you have trouble sleeping – the economic damage has not been given as much focus.
However, research suggests that changing the clock twice a year has a negative impact on the money side of very real things, and the evidence is mounting.
A study published last year by researchers at several business schools found that investors and capital market participants react more slowly to financial reports in the week after the “leap forward” – in the middle of the reporting season.
“These results are strongest among companies with investors who are more responsive to earnings news and among companies with a less sophisticated investor base,” the authors write. “Further analysis shows that our main findings are due to muted reactions to positive earnings surprises, consistent with cognitive impairment and investor pessimism that collectively underlie the diminished market reaction to earnings news.”
On Sunday, November 5, most people in the United States will set their clocks back an hour to “fall back” to Daylight Saving Time.
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Another group of business school researchers found that there was an increase in workplace injuries on the Monday after Daylight Saving Time.
Additionally, injuries were more severe (as measured by days lost from work due to injury), which increased by 67%.
A subsequent study found that the Monday after Daylight Saving Time saw a sharp increase in “cyberloafing,” where employees search the Internet for non-work-related activities.
A study published last year by researchers found that investors and capital market participants respond more slowly to accounting reports in the week following the switch to DST.
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There is also evidence that the time change leads to an increase in heart attacks, strokes and depression, leading to an increase in healthcare costs.
Even commuting is becoming more treacherous and expensive as the switch to daylight saving time has been linked to a rise in car accidents.
Additionally, while daylight saving time has been touted as an energy-saving measure, a 2008 study by the National Bureau of Economic Research found that daylight saving time actually led to a 1% increase in residential energy use by Indiana consumers – which was higher than households in the state additional costs added $9 million to their electric bills, adding another estimated $1.7 million to $5.5 million in “social costs of increased pollutant emissions.”
The actual dollar amount of the collective impact of these factors is difficult to determine, but a study by Chmura Economics & Analytics conducted a decade ago found that the spring change cost the U.S. economy more than $433 million.
In 2021, Allison Schrager, senior fellow at the Manhattan Institute, reported that daylight saving time alone has cost the airline industry hundreds of millions of dollars.
Although there is evidence that the time change is having a negative impact on Americans’ health and the economy, recent congressional efforts to end the practice appear to have stalled.
Sen. Marco Rubio, R-Fla., has for years led a bipartisan coalition to make current daylight saving time the new standard time.
His Sunshine Protection Act, which abolishes the time change, passed the upper chamber unanimously last year, but the House of Representatives never took it up in Congress.
In 2021, Allison Schrager, a senior fellow at the Manhattan Institute, reported that daylight saving time alone has cost the airline industry hundreds of millions of dollars.
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Rubio reintroduced his legislation in March, supported by several senators from both sides of the aisle, and Rep. Vern Buchanan, R-Florida, filed a companion bill in the House.
Both bills remain in committee.
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