Daylight Saving Time (DST) is a widely adopted practice
implemented by over 70 countries to align sunlight
with day-to-day activities and reduce energy demands.
However, we do not have a clear knowledge of how it
affects individuals’ welfare. Using a regression discontinuity
combined with a difference-in-differences design, we
find that the Spring DST transition causes a significant
decline in life satisfaction. By inducing a reallocation of
time, the transition into DST deteriorates sleep quality
and increases time stress, which in turn affects physical
and emotional health. Using an event study approach, we
find that such effects persist for about six days after the
DST transition. Conversely, we provide evidence that the
Autumn DST transition gives rise to a significant increase
in life satisfaction. Finally, using a simple cost-benefit
analysis, we discuss the potential benefits of ending DST.
