Iceland’s Four-Day Workweek Boosts Economy

Why this is here: Iceland saw a 4.9% economic improvement in 2025 with its four-day workweek, compared to a 2% average across Europe.

In Iceland, a trial of a four-day workweek—36 hours instead of 40—resulted in increased productivity and economic growth. The experiment began in 2019 and now applies to roughly 86% of the Icelandic workforce. Initial concerns about declining productivity proved unfounded, as output increased by 1.5% annually.

Companies and employees reorganized work by shortening meetings, eliminating unnecessary tasks, and reducing breaks. This shift correlated with a 4.9% economic improvement in 2025, exceeding the European average of 2%. Iceland’s strong digital infrastructure, including what is considered the best internet in Europe, facilitated this change.

Generation Lab studies show about 81% of young Icelanders believe the shorter workweek improves productivity and work-life balance. The study doesn’t account for potential industry-specific variations in success or long-term effects on the economy. Further research will examine the sustainability of these changes.