In a bold shift away from the traditional five-day grind, Iceland quietly launched one of the world’s most ambitious labor experiments — a four-day workweek that reduced hours without cutting pay. What began in 2015 as a test involving just 2,500 workers has since transformed the working lives of the vast majority of Icelanders. The results are not only surprising; they’re rewriting the global narrative on what it means to be productive.
A National Trial with Transformative Impact
From 2015 to 2019, the Icelandic government and Reykjavík City Council initiated extensive trials that involved reducing the standard 40-hour workweek to 35 or 36 hours. Importantly, participants continued receiving the same pay.
The trial represented around 1% of Iceland’s working population and covered a wide spectrum of jobs, from preschool educators and office workers to hospital staff and social service providers.
Rather than simply cramming a full-time schedule into fewer days, as seen in Belgium’s compressed workweek model, Iceland’s strategy focused on eliminating inefficiencies. Unnecessary meetings were removed, administrative processes streamlined, and task prioritization improved.
This meant that while the hours were fewer, the actual quality of work — and the experience of the employees — increased dramatically.
Better Work-Life Balance Without Hurting Productivity
The trial’s impact was swift and broad. Researchers from UK think tank Autonomy and Iceland’s Association for Sustainable Democracy (Alda) confirmed that “productivity remained the same or improved in the majority of workplaces.”
At the same time, workers reported being less stressed, experiencing lower risks of burnout, and enjoying more time for personal lives, hobbies, and families.
The societal ripple effect was enormous. Following the success of the trials, labor unions renegotiated working conditions. As a result, 86% of Iceland’s workforce has now either moved to shorter hours for the same pay or gained the right to do so under new labor agreements.
According to Autonomy, this transition was “an overwhelming success,” and the public sector has proven to be a leading force in championing shorter working weeks.
Economic Resilience and a New Definition of Efficiency
Contrary to fears that a shorter workweek might harm the economy, Iceland’s performance has remained strong. As of 2023, the country’s unemployment rate stood at a low 3.4%, while GDP growth hit 5%. These figures suggest that reducing hours didn’t just preserve productivity — it may have enhanced it.
The trial showed that a well-rested workforce is a more engaged and efficient one. Companies observed improved motivation and focus among employees, while individuals reported better health and stronger relationships.
Rather than losing money, many businesses found they were actually gaining ground, supported by a more resilient and content workforce.
The Global Echo of Iceland’s Success
Iceland’s pioneering model has not gone unnoticed. Inspired by its outcomes, countries across the world are launching their own experiments. Spain, for instance, has introduced a three-year pilot involving 6,000 workers to explore the feasibility of reduced hours.
Germany and the United Kingdom are also actively testing shorter workweek models, each adapting the concept to their own labor dynamics. Meanwhile, New Zealand has become a corporate testbed, with global consumer goods company Unilever offering employees a 20% reduction in hours without cutting salaries.
These international efforts may not mirror Iceland’s methods exactly, but they reflect a growing global interest in reevaluating how — and how much — we work.