joint with Jenny Wang

Across many cultures, resting instead of working is viewed as a barrier to higher earnings. This belief is also reflected in many canonical economic models. Recent empirical evidence highlighting the productivity benefits of rest challenges this belief. Yet, existing work tends to ignore individuals’ demand for restful activities and whether it aligns with their returns. In the context of an online labor market experiment in South Africa, we explore whether workers capitalize on the returns to short rest periods. After eliciting demand for rest, we estimate returns to rest for the same individuals and find that mandated rest boosts productivity by 0.3 standard deviations, thus making up for forgone earnings from resting. At the same time, only 19% of workers voluntarily choose to rest. Contrary to the notion of selection on returns, workers with high financial returns to rest do not select into rest. We provide suggestive evidence that misperceived financial returns are driving the disconnect between demand for and returns to rest. Our results provide proof-of-concept evidence that individuals may be misallocating effort between resting and working and could reach higher overall utility by working less. This highlights the importance of understanding misperceptions around rest, especially in light of the economic burden of long-term costs of overworking such as burnout.