London (CNN) — Iceland’s economy is outperforming most European peers following the introduction of a shorter working week with no wage loss across the country. research It was released in late October.

Between 2020 and 2022, 51 percent of the country’s workers accepted the offer of shorter working hours, including a four-day week, and that figure could be even higher today, two think tanks said.

The Autonomy Institute in the UK and the Icelandic Association for Sustainability and Democracy (Alda) said last year that Iceland had faster economic growth than most European countries and that its unemployment rate was one of the lowest in Europe.

“This study shows a real success story: shorter working hours have become widespread in Iceland… and the economy is strong on a number of indicators,” Gudmundur D. Haraldsson, a researcher at Alda, said in a statement.

In two large trials between 2015 and 2019, public sector workers in Iceland worked 35-36 hours a week without any pay cuts. Most participants previously worked 40 hours per week.

The trials involved 2,500 people (more than 1% of Iceland’s working population at the time) and aimed to maintain or increase productivity while improving work-life balance. The researchers found that productivity remained the same or increased in most workplaces, while employee well-being improved “significantly” across a range of measures from perceived stress and burnout to health and work-life balance.

Following the hearings, unions in Iceland negotiated reduced working hours for tens of thousands of their members across the country.

Economic ‘vitality’

According to the International Monetary Fund’s latest report, Iceland’s economy grew by 5% in 2023; This is a growth rate second only to Malta among rich European economies. World Economic OutlookIt was published earlier this week. This is much higher than the country’s average growth rate of almost 2 percent in the decade between 2006 and 2015.

However, the IMF predicts a very slow growth in Iceland this year and next year.

In its assessment in July, the agency said about the tourism-dependent economy: “Growth is expected to decrease in 2024 due to the further softening of domestic demand and the slowdown in the growth of tourism expenditures.”

The Autonomy Institute and Alda also said Iceland’s low unemployment rate was “a strong indicator of the vitality of the economy.”

According to the IMF’s World Economic Outlook, this rate was 3.4% last year; This was slightly above the average of developed European economies. The agency expects it to rise slightly to 3.8% this year and next.

A number of experiments with the four-day week have been conducted around the world. This includes a successful trial in 2022 at 33 companies, mostly in the United States and Ireland.

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