Iceland's economy thrives after adopting shorter work week with no pay cuts

Iceland's economy is thriving after implementing a shorter work week with no pay cuts. Research shows that over half of workers participated in this change between 2020 and 2022, contributing to strong economic growth and low unemployment. The economy grew by 5 percent in 2023, outpacing most European nations. This growth is significantly higher than the average rate of nearly 2 percent from 2006 to 2015. Unemployment remained low at 3.4 percent last year. While growth is expected to slow in 2024 due to reduced domestic demand and tourism spending, Iceland's low unemployment rate indicates economic strength. The country has seen successful trials of shorter work weeks, inspiring similar experiments globally.