But do I need to be more productive? It's a tradeoff - I can go home and spend more social time, leisure time and put more personal time into my projects if I sleep less. The 2-3 hours of extra time I get by sleeping like crap allows me to do things I wouldn't otherwise get to do. Productivity couldn't improve these if there's no time left in the day to do them. It costs me at work, I'm sure of it, but it hasn't gott…
If you are X% less productive you will be able to charge X% less for your work, on average, so you would need to work longer hours for the same pay. You might also be shortening your life by not sleeping enough, perhaps by a larger amount than you're gaining by sleeping less. That is clearly the case in the limit of not sleeping at all -- you would shorten your life to a month at best, not to mention that the quality…
That's making the huge assumption that you're willing to constantly seek your maximum pay and that you get paid solely for your measurable productivity output, which is in my experience very rarely the case. More often than not you get paid based on capabilities and responsibilities, not significantly more or less on your output. It's certainly not a direct X% less productive = X% less pay relationship. I believe it's been shown that seeking new employers is the best way to maximize pay, but that means interviews are often the difference between you and more pay, yet no one can judge future productivity in an interview.
> you would shorten your life to a month at best
To my knowledge, sleep dep hasn't actually killed people directly like this, they simply start sleeping.