Iceland became the first country to officially transition to a four-day work week, demonstrating that reducing working hours not only does not harm the economy but also contributes to its growth. After the implementation of this reform, the national economy did not experience a downturn — on the contrary, significant growth was recorded.
This is reported by Finway
GDP Growth and Outpacing Other Countries
According to Eurostat data, in 2025, Iceland’s gross domestic product increased by 1.3%. For 2026, further growth of 3% is projected. Iceland’s economic growth rates significantly exceeded those of leading European Union countries, including Germany, France, Switzerland, Austria, and Italy, where a five-day work week remains in place. Additionally, Iceland is experiencing a low unemployment rate.
Positive Changes in Society and Business
Analysts from the British center Autonomy and the Icelandic organization ALDA studied the effects of the transition to the new schedule. The research results indicate a significant improvement in quality of life:
- the level of stress and professional burnout among employees has significantly decreased;
- people have gained more time for family, hobbies, and relaxation, positively impacting their physical and mental health;
- companies reported increased focus and efficiency among employees who complete the same amount of work in less time.
“Stress and professional burnout among employees have been minimized; people have gained more time for family, hobbies, and proper rest, positively affecting their physical and mental health; businesses noted that rested employees work more focused and efficiently, completing the same workloads in less time.”
The implementation of this reform was made possible by large-scale pilot projects conducted from 2015 to 2019. Over 2,500 workers from various sectors participated in testing the new system — approximately 1% of the country’s population. Office workers, hospital staff, school employees, and police officers took part in the experiment. The work week was reduced from 40 to 35–36 hours, while salaries remained unchanged. To optimize processes, companies reduced meeting times and eliminated secondary tasks.
The Icelandic model perfectly aligns with the expectations of the young Generation Z, which values work-life balance and opposes a culture of overwork. Therefore, initiatives inspired by Iceland are actively being developed in the United Kingdom, Germany, Spain, and New Zealand.
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