The Economics of Time
Time Taxes: Paperwork and Waiting
How complicated government processes impose "time taxes" on citizens, why these fall hardest on the poor, and how digital services reduce them.
Dealing with government often costs time: forms, documents, queues and repeated visits. Some call these time taxes.
Examples
- Getting certificates for income, caste or residence.
- Applying for welfare schemes.
- Land records and property registration.
- Court cases that take years.
Why they matter
- Time costs deter people from claiming benefits they’re entitled to.
- They fall hardest on the poor, who may lose a day’s wages for each visit.
- They encourage middlemen and bribes to speed things up.
Sludge
Behavioural economists Cass Sunstein and Richard Thaler call unnecessary friction sludge, the opposite of a helpful nudge.
Reducing time taxes
- Digital services: DigiLocker, online applications and e-KYC.
- Direct benefit transfers.
- Doorstep delivery of services in some states.
- Automatic enrolment and fewer documents.
Measuring burden
Some governments measure the hours citizens spend on paperwork to target reductions.
A daily-wage worker visits a government office three times to get a certificate, losing three days' wages. An online application could have saved all three.
Time taxes can be substantial, especially for the poor.
- Government processes impose time taxes.
- They deter benefit claims and hurt the poor most.
- Sludge is unnecessary friction.
- Digital services and automatic enrolment reduce time taxes.
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