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

To study the effects of nutrition deficiency on labor market outcomes, we use high-frequency administrative data from a large retail chain in Indonesia, and study the nutrition shock induced by fasting during Ramadan on labor supply and productivity for Muslim salespersons, a non-physically demanding occupation. Based on an event study approach comparing Muslim and non-Muslim salespersons, we find a 21% decrease in productivity during the two hours before sunset, the period salespersons suffer most from energy deficiency. Productivity recovers immediately after sunset, when they are allowed to eat again. We also find gradually increasing effects of Ramadan on work absence among Muslim salespersons (2.6-5.1 percentage points), and it takes more than a month for such effects to fade away after Ramadan. Muslim salespersons leave work 15 minutes earlier during Ramadan during the hours of greatest energy deficiency. The effects of Ramadan are in line with nutrition mechanism. And we show that the effects are not likely driven by major competing explanations such as demand shocks, family reunion events, additional religious rituals, sleep deprivation, and holiday effects.