Financial Concerns and Sleeplessness

Do people worried about their personal finances experience lower quality sleep? Using a regression discontinuity research design, we find that eligible household heads surveyed just after the disbursement of an unconditional cash transfer in Indonesia report a 0.3 standard deviation improvement in sleep quality as compared to those surveyed just before the cash disbursement. The cash transfer appears to have alleviated financial concerns amongst household heads, who are responsible for satisfying the daily necessities of the household. Immediately after disbursement, eligible households report an increase in savings, and eligible household heads report feeling less worried, frustrated, and tired. Consistent with evidence from sleep medicine, eligible household heads displayed improved performance on memory and attention tests but not on reasoning or problem-solving tests. These patterns of results are not observed for household heads ineligible for the cash transfer, which suggests that our results are not driven by seasonal confounders or aggregate shocks. These results are also not observed for other members of eligible households, who are not responsible for satisfying the households’ financial needs. We also argue that nutrition, time in bed, and labor supply cannot explain our results.

(joint with Claire Duquennois - University of Pittsburgh)