3 Financial Benefits of Daylight Saving Time

Fall is time to turn back time.
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Lawmakers are considering passing the Sunshine Protection Act to make daylight saving time permanent year-round. Proponents argue the extra hour of evening sunlight could deliver financial benefits, including increased consumer spending.

The thinking is that Americans would take advantage of more daylight after work to shop, dine out and run errands. Supporters claim the effective “stimulus” of extended daylight could jumpstart the economy.

Some limited research backs this up. A 2016 study from JP Morgan Chase Institute found consumer spending dropped 3.5% in Los Angeles following the end of daylight saving time in November, when there was less light at night. While the scope was narrow, the findings suggest additional daylight hours motivate consumers to spend more, potentially helping businesses.

Some Industries See Dollar Signs in DST

The big economic argument in favor of DST is that it gives consumers more daylight hours to shop and spend money.

While the overall economic impact may be hazy, permanent daylight saving time would likely benefit industries like restaurants that operate in the evening.

With an extra hour of daylight into the night, demand for dining out, hotels, entertainment and other services could see a useful boost. This would also generate more income for workers in these sectors, which are still recovering from COVID-19 pandemic losses.

According to Reader’s Digest, the candy industry lobbied hard for an extension of DST, beginning in the 1980s. In 2005, it got its wish when President George W. Bush signed a law extending DST by four weeks to the first Sunday in November. The new timeline allowed Halloween to sneak in just under the wire for an extra hour of trick-or-treating.

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NPR reported in 2007 that the petroleum industry has been aware since at least 1930 that fuel consumption increases during DST — and that the barbecue and golf industries credit DST for hundreds of millions of dollars in increased sales.

A PNC economist argues that there’s just no conclusive evidence — but there’s no denying that certain industries have fought to keep and expand DST, because they think it’s good for business.

Energy Savings From Extra Sunlight Seem Questionable

Another commonly cited benefit of permanent daylight saving time is potential energy savings, although the evidence seems mixed at best.

Research on potential energy savings from daylight saving time has produced mixed results. A 2008 Department of Energy study found a small 0.5% decrease in daily electricity demand after an extension of daylight saving time. However, a separate 2008 study showed that implementing daylight saving time in Indiana increased energy consumption overall due to higher heating and cooling costs outweighing reduced lighting needs.

With inconclusive data confined to limited geographies, the energy savings argument for year-round daylight saving time remains questionable absent wider studies. Switching time zones does not change the fact businesses and homes require lighting and climate control.

Potential Safety Benefits From Evening Sunlight

Aside from economic impacts, some advocates cite safety as a benefit of permanent daylight saving time.

Experts argue the extra hour of light in the evening provides visibility for commuters that helps reduce car accidents. According to Steve Calandrillo of the University of Washington, “darkness kills” when it comes to traffic safety.

So while the research is fuzzy regarding macroeconomic effects, the switch could still save lives by decreasing dangerous nighttime driving. And fewer accidents means fewer people paying the related costs — from car repairs to medical bills to increased insurance premiums — which leaves more money in their pockets to spend on other things.

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Workplace Productivity Plummets One Day in Spring

But it’s not all rosy — DST’s detractors have plenty of ammunition, too.

In 2014, a series of research studies revealed that on the Monday after the DST changeover in spring, the country goes to work with the equivalent of a hangover. The New York Times reported on the research, which found that even though the 2 a.m. time change happens on Sunday, it still robs most people of about 40 minutes of sleep the night before work on Monday — and those 40 little lost minutes are a big drain on workplace productivity.

The research showed that mining injuries jumped by 6% the day after the changeover, with many of the extra injuries being severe enough to have a real economic impact. Lost workdays due to injury skyrocketed by 67% — that’s 2,600 extra workdays missed thanks to the groggy Monday morning after the DST changeover.

Those who weren’t injured were much more likely to be mailing it in on the job. What the Times called “cyberloafing” — slacking off online instead of working — increased by 20%. All in all, springing forward robs the economy of around a half-billion dollars, and none of that lost productivity and missed work is regained when the clocks refund the missing hour in the fall.

More Research on National Impact Is Needed

While supporters promote the possible economic benefits, economists note there is minimal research on how permanent daylight saving time would impact the national economy. Most existing analyses center on specific locales, like Los Angeles or Indiana, and may not apply broadly.

In the future, if Congress passes the Sunshine Protection Act to lock in daylight saving time, researchers will have richer data to analyze the impacts.

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With a national permanent change, robust studies could finally examine how all regions and sectors are affected. Experiencing year-round daylight saving time firsthand may inform the debate beyond theoretical arguments.

Until then, the financial benefits of daylight saving time remain theoretical and anecdotal at best. Targeted businesses stand to gain, but the jury is still out on net effects across the whole economy.

Andrew Lisa contributed to the reporting for this article.

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