Iceland’s four-day workweek: A bold reform delivering remarkable results six years on

Since officially adopting a four-day workweek in 2019, Iceland has emerged as a global example of how reducing working hours can transform professional life while significantly enhancing workers' well-being. This groundbreaking shift, which began as an experiment in 2015, has not only maintained productivity but also fostered economic growth and improved quality of life for employees.

A gradual experiment turned national policy

Iceland’s journey toward a four-day workweek began in 2015 with a large-scale pilot program involving 2,500 workers—approximately 1% of the country’s workforce. The experiment revealed promising effects on workplace organization and employee satisfaction, prompting the government and social partners to expand the initiative.

By 2019, collective agreements enabled 90% of Icelandic workers to reduce their workweek from 40 to 36 hours without any loss of pay. Unlike countries like Belgium, where compressed four-day weeks require longer daily hours, Iceland embraced true reductions in working time. This approach focused on better task management and cutting unnecessary meetings, ensuring employees were not overburdened.

Positive impacts on productivity and mental health

Despite initial concerns, reducing working hours did not harm productivity. In fact, research conducted by the Autonomy Institute and the Association for Sustainability and Democracy (Alda) found that productivity remained stable, even increasing in some sectors. Workers optimized their schedules by minimizing distractions and prioritizing essential tasks.

The benefits for employees’ well-being were equally striking. Over 80% of participants expressed satisfaction with the new model, and more than 60% reported improvements in their personal lives. Stress levels and burnout risks dropped significantly as workers enjoyed more time for rest, family, and leisure. This shift contributed to better mental and physical health across the workforce.

Economic growth amid reduced hours

Contrary to fears that shorter workweeks might hinder economic performance, Iceland has experienced sustained growth. In 2023, the country recorded a 5% economic growth rate—among the highest in Europe—and maintained a low unemployment rate of 3.4%, well below the European average. These figures demonstrate that shorter working hours can coexist with economic competitiveness.

However, the reform’s implementation remains uneven. While 71% of public sector workers benefit from reduced hours, only 42% of private-sector employees have access to the same. This disparity highlights ongoing challenges in extending the model across all industries.

Inspiring change beyond Iceland

Iceland’s success with the four-day workweek has captured international attention. Spain recently launched a three-year trial involving 6,000 workers, while companies in New Zealand and Austria have adopted similar models with promising results.

Within Iceland, the initiative continues to reshape workplace culture. Since the program’s expansion, many unions have renegotiated working hours, and today, 86% of Icelandic workers either benefit from reduced hours or have the option to do so.

As the global workforce evolves, Iceland’s experience underscores the potential for more flexible work arrangements to enhance both employee well-being and economic performance. This pioneering reform may serve as a blueprint for other nations seeking to rethink their approach to work.