Reykjavík isn’t the city with the busiest traffic. But if you wander around town on a Friday afternoon, you’d find more people in cafes than in cars. For many Icelanders, the workweek is already over.
Nearly 90% of the country’s workforce now works fewer hours for the same pay. They shortened the work week from 40 hours to 36 hours. Some people put an extra hour over four days and have a four-day work week, others just have a short Friday. But either way, it seems to be working.
“This study shows a real success story: shorter working hours have become widespread in Iceland . . . and the economy is strong across a number of indicators,” Gudmundur D. Haraldsson, a researcher at Alda, said in a statement.
More work time doesn’t necessarily mean more work
The modern five-day, 40-hour workweek is a relatively recent invention. It was born in the 20th century, not out of political desire for welfare but because labor unions pushed for limits on the grueling, long-hour six-day schedules that were common in factories. In 1926, Henry Ford made headlines by adopting a five-day workweek at his automobile plants — without reducing pay. His factories did just fine, and his workers were happier. The idea that “more hours equal more output” began to erode.
There’s nothing inherently optimal about the current workweek. Beyond a certain point, fatigue, stress, and diminishing focus cause output to plateau — or worse, decline. Some studies have suggested that a shorter work week would offer substantial social benefits at the cost of very minor productivity outputs. Iceland decided to put that to the test, nationally.
Iceland’s journey started modestly enough. Between 2015 and 2019, Reykjavík City Council and the national government launched trials with 2,500 workers — about 1% of the working population at the time. Public employees from schools, hospitals, social services, and offices shifted from 40 hours a week to just 35 or 36, with no pay cut.
The results were promising, but not entirely convincing. Businesses and administration stayed intact, and some parts seem to actually function better. But results published in 2021 showed that the four-hour reduction in the work week was reduced to 1-3 hours in most places. The good part was that stress and burnout plummeted and so did sick days. Workers reported better health, productivity was largely unchanged.
Productivity remained the same or improved in the majority of workplaces, researchers concluded. In response, unions started pushing for changes in contracts. They wanted to try this nationally.
Economic growth without burnout
This isn’t exactly a four-day work week, as others are proposing. It’s a bit less ambitious, a four-and-a-half day work week. Many Icelandic workers have opted to spread their reduced hours over the traditional five-day workweek, resulting in shorter daily work hours. Others have chosen to take a half-day off each week or a full day off every other week. This flexibility was an important part of what enabled the strategy to work nationally.
But critics of the four-day week asked the same question: How will it affect the economy?
In Iceland, the answer so far is: apparently positively. According to the International Monetary Fund’s 2024 World Economic Outlook, Iceland’s economy grew by 5% in 2023 — outpacing almost every other advanced European country except Malta. Unemployment stood at just 3.4%, well below the European average.
That doesn’t necessarily mean Iceland wouldn’t be doing even better with a traditional work week. But there’s no evidence so far that shorter hours are dragging the economy down.
María Hjálmtýsdóttir, a secondary school teacher and activist in Kópavogur, knows the numbers. explains how the change feels. But she also knows how change feels. Her husband Tumi, who works in a government office, now takes two full Fridays off each month. He sleeps in, cleans the kitchen, chats with friends, picks up their son from school.
Since I collect our son the other days, this gives me the freedom every other Friday afternoon to meet friends for a chat, volunteer, or simply to go to the swimming pool alone, which is an absolute gamechanger for a tired teacher who wants to escape burnout.
Could this work worldwide?
Iceland is, in many ways, an outlier. It’s a small, cohesive population. But its workweek experiment is inspiring change far beyond its shores — and it’s far from the only place experimenting with this.
In 2022, a large-scale pilot in the UK tested a four-day week across 61 companies, ranging from marketing firms to local fish-and-chip shops. Employees worked fewer hours without a pay cut. The results showed that over 90% of the firms stuck with it after the trial ended. Productivity stayed the same or improved, staff turnover dropped, and workers reported feeling less stressed and more engaged.
In Spain, a government-funded pilot launched in 2021 offered financial support to small and medium-sized businesses willing to try a shorter week. The goal was both to boost mental health and to stimulate job creation. While full results are still forthcoming, early reports suggest improved worker morale and sustained output. Even in Japan — long known for its intense work culture — change is bubbling. Microsoft Japan made headlines in 2019 after testing a four-day workweek with full pay. Productivity jumped by 40%, electricity use dropped by nearly a quarter, and paper printing declined by almost 60%. The company described the outcome as “very positive.” Belgium and the US have had their own trials, with general success.
Each case reflects local economic structures and cultural expectations, but they all point to the same conclusion: fewer hours don’t necessarily mean less work. You need to consider the different cultural and economic conditions, but it can work. Happier, healthier, and more satisfied employees can get more done. They work smarter, better.
Iceland’s model, built on trust, flexibility, and strong union negotiations, suggests that success can be achieved even at a larger scale.