In Iceland the adoption of one shorter working weekkeeping salary levels unchanged, seems to have had a positive impact on the economy and on the lives of workers. The change, launched on an experimental basis between 2015 and 2019 in the public sector, included a reduction of weekly hours to 35-36 hours.
The experiment involved over 2,500 people, a significant representation in a country with a small population, to measure how less time dedicated to work could impact productivity and well-being.
The results, as reported by the Autonomy Institute and the Icelandic Association for Sustainability and Democracy (Alda), demonstrated that not only productivity has remained stable, but, in many cases, it is even improved. Furthermore, the workers found a clear increase in well-beingreporting lower levels of stress and burnout, better health and a healthier balance between work and personal life.
A significant part of the workforce has seen its hours reduced
In the wake of the success of these trials, Icelandic trade unions have negotiated a reduction in working hours for a significant part of the workforceextending this new configuration to a large portion of the country’s workers.
This change coincided with a period of notable economic growth: In 2023, Iceland’s economy grew by 5%, one of the highest rates in Europe, second only to Malta. Iceland, therefore, stood out as one of the fastest growing economies, with a stable unemployment rate and among the lowest in Europe, at 3.4%.
Despite the positive results, the International Monetary Fund predicts a slowdown of Icelandic economic growth for the next few years, linked above all to the decrease in domestic demand and a reduction in tourism growth. However, low unemployment and high productivity keep Iceland as an example of how innovative policies in the workplace can coexist with a solid economy.
This experience joins other successful experiments with the reduced working week, like the one conducted in 2022 in 33 companies between the United States and Ireland. Interest in a four-day week is growing globally and many countries are looking at the Icelandic model as a possible path to improve well-being without compromising productivity. A change that we hope will come soon, even among us.
