Today, nearly 90 percent of Icelandic workers enjoy a reduced workweek, with no loss in pay.
In 2019, Iceland made headlines as one of the first countries to implement a four-day workweek, not by passing a blanket law, but through agreements that allowed workers to negotiate shorter hours. Nearly six years later, the results are clear: this bold move has proven to be a game-changer, not just for the workforce, but for society as a whole.
When the four-day workweek was first introduced, there were numerous concerns both locally and by international observers. Skeptics feared a drop in productivity, higher business costs, and challenges in maintaining service levels. However, the Icelandic experience has put these worries to rest. Reports indicate that productivity remained stable or even increased in some sectors, all while workers reported better mental health, a crucial factor that resonated especially with Generation Z. The decrease in stress, combined with a better work-life balance, had a profound positive impact on employee well-being.
Iceland’s experiment began in 2015 with a small pilot program involving about 2,500 workers, roughly 1 percent of the country’s workforce. This trial exceeded expectations, with 86 percent of participants voicing their support. Thanks to its success, the program became official in 2019. Today, nearly 90 percent of Icelandic workers enjoy a reduced workweek of 36 hours, down from the previous 40, with no loss in pay.
One of the standout aspects of Iceland’s success was its promotion of gender equality. By freeing up time and allowing men to share more in household responsibilities, the four-day workweek encouraged a healthier balance between work and home life. Fathers, no longer bound by traditional work schedules, were able to spend more time with their children and contribute to household tasks.
For Generation Z, who grew up in a digital-first world, adapting to a more flexible workweek was seamless. As digital natives, they found it easier to embrace the new work dynamics, contributing to the smooth transition to the four-day workweek.
In 2023, Iceland’s economy expanded by 5 percent, a growth rate second only to that of Malta among rich European economies, according to the IMF’s World Economic Outlook, published in October 2024. That is much higher than the country’s average growth rate of almost 2 percent in the decade between 2006 and 2015.
No wonder other European countries are considering following Iceland’s lead. Germany, Portugal, Spain and the UK have run, or are running, pilot projects. And in 2023, Belgium became the first EU country to legislate a four-day week for anyone who wants it. However, unlike our Icelandic model, anyone signing up to work four days in Belgium has to condense the same number of working hours into fewer days. Maybe that’s why fewer than 1 percent of people have done so.