Nutrition, Labor Supply, and Productivity: Evidence from Ramadan in Indonesia

Abstract

This paper studies the short-term effects of nutrition deficiency on labor supply and productivity. Using high-frequency administrative data from a retail chain in Indonesia, we exploit the nutrition shock induced by Ramadan fasting among Muslim salespersons, a non-physically demanding occupation. Based on an event study approach, we find a 30% decrease in productivity for them during the two hours before sunset, when they experience the most energy deficiency. Their productivity recovers immediately after sunset, when they can break their fast. They leave work 32 minutes earlier during the hours of greatest energy deficiency. The effects are in line with the nutrition mechanism and are not likely driven by major competing explanations such as demand shocks, fast-breaking events, dehydration, and sleep deprivation.

Keywords: Nutrition deficiency, Labor supply, Productivity, Ramadan fasting

JEL Classification: I15, J24, Z12