According to recent data, Iceland has implemented a nationwide reduced working week with no loss of income as the economy outperforms most of its European neighbors.
Between 2020 and 2022, 51% of workers in the country accepted the offer of shorter working hours, including a four-day week.
Iceland experienced greater economic growth last year than other European countries, and its unemployment rate is among the lowest in Europe, according to the Autonomy Institute in the United Kingdom and Iceland’s Association for Sustainability and Democracy (Alda).
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Between 2015 and 2019, public sector employees in Iceland worked 35-36 hours per week with no salary reductions. Many participants had previously worked 40 hours per week.
The studies included 2,500 people — more than 1% of Iceland’s working population at the time — and were designed to maintain or increase productivity while enhancing work-life balance.
Researchers discovered that productivity remained constant or improved in the majority of businesses, while workers’ well-being increased “dramatically” on a variety of metrics, including perceived stress and burnout, health, and work-life balance.
Following the trials, Icelandic trade unions negotiated reductions in working hours for tens of thousands of their members across the country.
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In 2023, Iceland’s economy expanded by 5%, a growth rate second only to that of Malta among rich European economies, according to the International Monetary Fund’s latest World Economic Outlook.
However, the IMF forecasts considerably slower growth in Iceland this year and next.
Iceland’s low unemployment rate is “a strong indicator of the economy’s vitality,” the Autonomy Institute and Alda also stated.
According to the IMF’s World Economic Outlook, that rate stood at 3.4% last year, just over half the average for advanced European economies. The agency expects it to tick up slightly to 3.8% this year and next.
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There have been a number of experiments with the four-day week around the world. This includes a successful trial in 2022 across 33 companies, with the majority based in the United States and Ireland.