Shorter Work Week: Good for Employers and Employees!

Since Icelandic employees have adopted shorter workable hours, including a four-day week, with no loss in pay, the Nordic Island nation has observed faster economic growth than most of its European counterparts.

“This study shows a real success story: shorter working hours have become widespread in Iceland… and the economy is strong across a number of indicators,” explains Gudmundur D. Haraldsson, a researcher at UK’s Autonomy Institute and Iceland’s Association for Sustainability and Democracy (Alda).

Two large trials took place in 2015 and 2019 with 2,500 public sector employees – more than 1% of Iceland’s working population at the time – working 35-36 hours per week, with no reduction in pay, instead of 40 hours a week. The results showed that productivity stayed the same and work-life balance improved. Between 2020 and 2022, 51% of workers had accepted the offer of shorter working hours. The figure is likely to be higher today. In 2023, Iceland’s economy expanded by 5%, much higher than the country’s average growth rate of 2% between 2006 and 2015. According to the Autonomy Institute and Alda, the country’s low unemployment rate is “a strong indicator of the economy’s vitality,” standing at 3.4% last year – just over half the average for advanced European economies – and expected to tick up to 3.8% this year and the next. Worldwide, there have been many experiments with the four-day week, including a successful trial in 2022 across 33 companies mainly based in the United States and Ireland.