This is what happened when Iceland introduced a 4-day working week

Iceland welcomed the concept of ​​a four-day working week, and as a result the country’s economy is booming– CNN reported.

This decision helps Iceland get ahead of other countries since the shorter working week didn’t end in a lack of staff’ wages. Over 50% of the country’s workforce accepted the offer of shorter working hours in 2020-2022. However, two think tanks – the UK Autonomy Institute and the Icelandic Association for Sustainable Development and Democracy (Alda) – said the figure was higher than 2024. “This study shows a real success story: shorter working hours have become common in Iceland… and the economy is strong in many respects,” Alda researcher Gudmundur D. Haraldsson said in a statement.

In 2023, Iceland showed faster economic growth in comparison with most European countries – growth of 5% – a huge increase in comparison with 2% in 2006-2015. The unemployment rate was also among the many lowest in Europe, showing a “strong indicator of economic vitality.” The IMF’s World Economic Outlook report shows that the rate of interest stays stable at 3.4%, just over half the typical for advanced European economies. Interest rates are expected to rise to three.8% in 2024 and 2025.

Years earlier, between 2015 and 2019, two large studies were conducted by which public sector staff worked 35-36 hours a week without taking a pay cut. With 2,500 participants, representing over 1% of the country’s working population on the time, most had previously worked 40 hours a week. The goal was to take care of or increase productivity while improving work-life balance.

The data showed that productivity remained the identical or increased in most work environments, while worker well-being increased “dramatically” on several measures starting from stress and burnout to health and work-life balance.

According to Live Now Fox, researchers analyzed the outcomes of a labor market survey conducted by the Institute for Social Science Research on the University of Iceland within the hope of gaining insight into work patterns, the work environment and the explanation why people leave paid work. It found that 62% of people that worked short-time between 2022 and 2024 were more satisfied with their working hours, while only 4% of staff were more dissatisfied.

78% of respondents stated general satisfaction with the presented working time.

As a results of the trial, Icelandic trade unions negotiated reduced working hours for tens of hundreds of their members across the country.