Economy

The negative effects of DST on our health are becoming increasingly known. However, concerns are often expressed that the positive effects of DST on the Economy would be lost if a permanent standard time was implemented. In this chapter we show that studies do not support these concerns. An analysis of the available literature shows the opposite: changing to year-round standard time would not only be beneficial for our health, but also for the economy.

The socio-economic effects associated with daylight saving time were compared in the form of estimates based on the available literature. The aim is to get an idea of the order of magnitude these effects have on the economy in general, using the current time regime as the default (5 months in standard time and 7 months in daylight saving time).

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Figure 1:  Magnitude of the influence of year-round time regimes on German economy sectors, shown as percentages of German gross domestic product (GDP).

Results of the analysis:

  • The European Union's concern that the time zones chosen by individual countries could negatively affect trade in goods and services within the euro zone is unfounded. Any of the options for time zones currently being considered by member states would have either no or ridiculously low economic impact (between 0% and 0.005% of total trade, see Figures 1 and 2).

 

  • A gain of 3% in the commercial & leisure sector (tourism, restaurants, travel, etc.) is attributed to DST during the summer. For Germany, however, this potential gain does not compensate the increased health expenditure and the loss of productivity caused by DST (Fig. 1,2).  Even for a country like Portugal, where this 3% gain in this sector equates to 0.3% of GDP, it also does not outweigh the loss of productivity experienced during DST (Fig. 2). The effects of DST in this sector during winter are unknown.

  • ​​ The greatest economic impact of DST is its negative effect on productivity in the workplace (see Fig. 1). This results in a productivity loss in Germany in the order of several tens of billions of euros, more than 1% of GDP (Fig. 2). Wages under permanent DST are also 3% lower than under permanent standard time.  

  • According to studies, health costs increase significantly due to DST (Fig. 1), even though only part of the effects of DST on health predicted by experts were taken into account in present analyses. In Germany, the effect of DST on health is in the order of billions of euros (Fig. 2). However, the rise in mortality and disease should not only be measured from an economic point of view.

  • There are no significant savings in electrical energy through the 7 month period in DST. Nothing is known about the effects in the remaining 5 months in standard time. For Germany, the estimated savings in electricity consumption are around 0.1% (Fig. 2)  [HaHI18, IrHH17]. However, there are signs of increased fuel consumption with DST. Also, due to DST, a slight increase in forest fires occurs, which unnecessarily contribute to environmental pollution and destruction.  

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Figure 2: Financial gains (positive) and losses (negative) with standard time and DST all year round, compared to the current time regime (UTC+01:00/+02:00).

Conclusion: From an economic point of view, a time zone that is as close as possible to natural time is recommended. Among the time zones under discussion, permanent standard time (Central European Time, UTC+1, winter time) is therefore advantageous for Germany. This would lead to an economic gain relative to the current system (figure 2). UTC+0.75 (UTC+00h45min) would be even better. In contrast, year-round DST is likely to result in an increase in government spending and a negative effect on GDP.