Iceland welcomed the idea of a four-day work week, and as a result, the country’s economy is booming, CNN reported.
The decision is helping Iceland outperform other countries, as the shorter work week issued no loss in pay for employees. Over 50% of the country’s workforce accepted the offer of shorter working hours between 2020 and 2022. However, two think tanks — the Autonomy Institute in the United Kingdom and Iceland’s Association for Sustainability and Democracy (Alda) — found that number is higher as of 2024. “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,” Alda researcher Gudmundur D. Haraldsson said in a statement.
In 2023, Iceland proved to have faster economic growth over a majority of European countries — expanding at 5% — a vast increase from 2% between 2006 and 2015. The unemployment rate was also one of the lowest in Europe, showing a “strong indicator of the economy’s vitality.” IMF’s World Economic Outlook found the rate stood stagnant at 3.4%, a little over half the average of advanced European economies. Rates are expected to go up to 3.8% in 2024 and 2025.
Years prior, between 2015 and 2019, two large trials were performed where public sector employees worked 35-36 hours per week without a reduction in pay. With 2,500 participants, which is more than 1% of the country’s working population at the time, a majority previously worked 40 hours a week. The goal was to maintain or increase productivity while work-life balance improved.
Data revealed that productivity stayed the same or heightened in most employee environments, while employee’s well-being increased “dramatically” on certain measures, ranging from stress and burnout to health and work-life balance.
According to Live Now Fox, researchers examined the results of an employment market survey conducted by the University of Iceland’s Social Science Research Institute in hopes of gaining an understanding of job patterns, work environment, and the reasons behind individuals leaving paid employment. Sixty-two percent of people with reduced work hours between 2022 and 2024 were found to be more satisfied with their work time, while only 4% of workers were found to be more dissatisfied.
Seventy-eight percent reported overall satisfaction with the presented work time.
The trial resulted in Icelandic trade unions negotiating reductions in working hours for tens of thousands of their members across the country.
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