Economists have largely ignored the effects of sleep on health and human capital. The medical 
literature provides extensive evidence of the association between sleep deprivation and health. However, most of these studies do not attempt to analyze the causal relationship between sleep duration and health outcomes. Furthermore, we know relatively little about the effects of sleep duration on cognitive skills in developing contexts. However, in many low- and middle-income countries sleep deprivation is becoming increasingly recognized as a public health challenge, particularly because of its effects on the elderly population.
Growing evidence on a downward trend in average sleep duration, along with an increased incidence of sleep deprivation has raised concern about the potential effects on population health and health care costs (Roenneberg, 2013). Insufficient sleep is associated with a reduction in daytime alertness; excessive daytime sleepiness, which impairs memory and cognitive ability (Alhola and Polo-Kantola, 2007; Killgore, 2010); occupational and automobile injuries (Dinges, 1995); poor health and obesity (see Cappuccio et al., 2010, for a systematic review). Though most sleep research has focused on developed countries, recent studies suggest that sleep disturbances in the developing world are far higher than previously thought (Stranges et al., 2012).
This paper analyzes the effects of sleep duration on cognitive skills and depression symptoms of older workers in China. According to the estimates of the China Sleep Research Society, approximately 40% of Chinese suffer from a sleeping disorder
Cognitive skills and mental health have been associated with sleep duration and are known to be strongly related to economic behavior and performance. However, causal evidence is lacking and little is known about sleep deprivation in developing countries. We exploit the relationship between circadian rhythms and bedtime to identify the effects of sleep using sunset time as an instrument. Using the Chinese Health and Retirement Longitudinal Study, we show that a later sunset time reduces significantly sleep duration and that sleep duration increases cognitive skills and eases depression symptoms of workers aged over 45 years. The results are driven by employed individuals living in urban areas, who are more likely to be constrained by rigid working schedules. On the contrary, we find no evidence of significant effects on self-employed and farmers.
Chosen excerpts by Job Market Monitor. Read the whole story at Circadian Rhythms, Sleep and Cognitive Skills: Evidence from an Unsleeping Giant
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