In 2019, Iceland made headlines worldwide with a bold and innovative approach to labor reform, implementing a 4-day work week across the country. This shift was not a one-time change, but part of an ongoing experiment that had begun in 2015. Initially involving 2,500 workers, the trial was designed to reduce work hours from the standard 40-hour week to just 35 or 36 hours, without reducing employees’ pay. While the idea of a shortened work week had been debated globally for years, Iceland became the first country to embrace it on a nationwide scale, demonstrating a radical departure from traditional work culture.
Transformative Impact of the Trial
The experiment itself was quite comprehensive, covering a wide range of sectors and public services, including preschool educators, healthcare workers, and office staff. Iceland’s government, along with Reykjavik City Council, spearheaded the initiative. Workers were not simply expected to condense their hours into fewer days, as seen in other countries like Belgium. Instead, Iceland aimed to improve workplace efficiency by removing unnecessary meetings, streamlining administrative processes, and optimizing task prioritization.
This approach focused on improving the quality of work, rather than simply reducing the quantity of hours worked. As a result, the productivity of workers either remained stable or even improved in many cases. According to research conducted by UK think tank Autonomy, and Iceland’s Association for Sustainable Democracy (Alda), employees reported significant improvements in job satisfaction, mental health, and work-life balance. This was coupled with a noticeable reduction in stress and a decline in instances of burnout.
The public reaction to the trials was overwhelmingly positive, and it became clear that the shortened workweek was a win for both employees and employers. By 2021, 86% of Iceland’s workforce had either transitioned to shorter hours or gained the right to do so through new labor agreements, many of which were negotiated by labor unions. This widespread adoption was not based on a government mandate, but rather on the collective bargaining power of the unions and workers themselves.
Economic Resilience and a New Definition of Efficiency
One of the most significant concerns with reducing the workweek was whether it would negatively impact Iceland’s economy. Critics argued that reducing hours would lead to decreased productivity, lower profits, and a struggling economy. However, these concerns were unfounded. As of 2023, Iceland’s unemployment rate remained impressively low at 3.4%, and the country experienced GDP growth of 5%. These figures suggest that, contrary to initial fears, the transition to a shorter workweek did not just maintain Iceland’s economic stability but actually contributed to economic resilience.
A key reason for this success lies in the improved motivation and focus of workers, who were no longer overburdened with excessive hours. Companies reported that the engagement of their employees increased, and workers felt more connected to their work and their teams. This was not just a benefit for employees; businesses began to see tangible improvements in output, suggesting that a well-rested workforce is more effective and efficient. Furthermore, the increased work-life balance allowed employees to manage their personal lives better, leading to improved health and stronger relationships outside of work.
A Global Trend Inspired by Iceland
Iceland’s success in reducing the workweek has sparked global interest, with countries and companies around the world looking to replicate its model. In Spain, the government launched a three-year pilot program in 2021, involving 6,000 workers, to test the feasibility of reducing working hours. Similarly, both Germany and the United Kingdom have initiated their own trials, adapting Iceland’s model to fit their labor markets.
In addition to government trials, private companies have also embraced the concept. In New Zealand, global consumer goods giant Unilever introduced a pilot program offering employees a 20% reduction in work hours without any pay cuts. This shows that the shift towards a shorter workweek is not just a matter for governments but is being tested by businesses that see the potential benefits of increased worker satisfaction, productivity, and engagement.
Other countries are also exploring how a shortened workweek can contribute to greater gender equality and better health outcomes. Iceland’s labor reforms have already begun to show signs of improving gender dynamics, with men becoming more involved in domestic chores and family responsibilities, thanks to having more time off. This has led to a more equitable distribution of unpaid labor in households, benefiting families and society as a whole.
The Future of Work
Iceland’s experiment continues to raise important questions about the future of work. As nations and corporations around the world take inspiration from the Icelandic model, the conversation around productivity and employee well-being is changing. The results of Iceland’s trials suggest that efficiency should not be defined by the number of hours worked, but by the quality of the work done. This paradigm shift could pave the way for a more sustainable and human-centered model of employment—one that prioritizes not just economic growth but also the health, happiness, and balance of the workforce.
Iceland’s success with the 4-day workweek is only the beginning of a larger movement that questions the traditional 9-to-5, 40-hour work model. While not every country or company may be able to replicate Iceland’s exact approach, the fundamental lessons learned from this experiment—efficiency over hours, worker well-being, and the pursuit of greater flexibility—are already resonating around the world. As more data emerges from international trials, it will be interesting to see how this global trend evolves and whether other countries will follow Iceland’s example in redefining the future of work.