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What might be the effects of a four-day working week?

A shortened working week has been proposed to improve work-life balance, raise productivity and support recovery from the pandemic. Current trials can shed light on whether a four-day week may impose costs on employers and exacerbate labour market shortages.

The idea of supporting the transition to a ‘four-day week’ – with no loss of pay compared to a ‘standard’ Monday to Friday working week – has been gaining traction. 

Iceland recently experimented with a shorter working week and claimed it had been an overwhelming successSpainand New Zealand have both recently announced trials of a 32-hour week. Closer to home, the Scottish government has set out plans for a £10 million pilot that will help companies explore the benefits and costs of moving to a four-day working week and Belfast City Council has mooted the idea of a four-day week on full-time pay.

But what is a four-day week? When people talk about this idea, it is usually shorthand for a world where people typically work around 30 hours a week, with flexibility over when to work those hours. 

The enthusiasm for a four-day week has often been motivated by two main beliefs. First, it is argued that shorter working weeks can lead to higher productivity (Coote et al, 2020). Second, shorter hours can be associated with higher levels of happiness and improved work-life balance (Gash et al, 2018). 

More recently, shorter working weeks have also been proposed as a means of maintaining high employment in the aftermath of the Covid-19 pandemic (Frey et al, 2020). Rather like an extended furlough scheme for sectors badly affected by the pandemic, the idea is that this would prevent lay-offs and support a transition to ‘more desirable’ patterns of working time in the longer term.

But is a move to a four-day week – without loss of pay for employees – really viable? This article first considers what such changes would look like in historical context, and goes on to examine the potential impacts.

What does the evidence tell us about the trends in hours worked and the desire for different working patterns?

Seen in a historical context, the aspiration for a four-day week can be seen as the continuation of a longer-term trend (see Figure 1). Average weekly hours worked in the UK fell from 66 in 1800 to 56 in 1900, and then to 49 in the 1930s. 

Figure 1: Average weekly hours worked, 1750 to 2016

Source: Bank of England, A Millennium of Macroeconomic Data for the UK

This was when Keynes famously predicted that we would be working as few as 15 hours a week by 2030. He was right about the direction of travel, but wrong about how quickly we would get there. By 2019, average hours worked by men and women employees were 37 and 30 respectively (although both men and women who are working full-time put in an average of 37 hours a week).

What has driven these long-term trends? One factor is certainly the growth in hourly real wages. As real wages grow over time, workers tend to choose more leisure time over working. From this perspective, a slight slowing of the rate of decline in hours worked since 2009 – in the UK in particular, but in other countries too – is likely to be due in part to the stagnation in real earnings growth (Bell and Gardiner, 2019).

But employment regulations and institutions have played an important role too. A relatively recent example is the implementation of the European Working Time Directive (WTD). The WTD – which was implemented in the UK in 1998 and which established a 48-hour maximum working time in any seven day period, albeit with the possibility for opt-out – can account for some of the fall in average working time over the subsequent decade (Bank for International Settlements, 2014).

Policy and institutional factors also help to explain cross-country differences in hours worked. Back in the 1960s and 1970s, workers in Germany and France worked similar hours as those in the UK (and United States). Since then, hours worked have fallen more rapidly in Germany and France. In both countries, union movements placed significant emphasis on reducing working time, and in France in particular this coincided with an emphasis on regulation to incentivise working time reductions.

Today, many of these historical differences in hours worked persist in the way that the WTD is implemented. In the UK, maximum weekly hours are legislated at 48 hours, the maximum permissible under the WTD. Yet most other countries, including France, Germany and Sweden, tend to legislate for shorter standard weeks, with the possibility for extensions under certain conditions or circumstances. 

What do the data tell us about the hours that employees in the UK would like to work? The Labour Force Survey asks workers whether they would like to work longer hours (at their current wage rate), or work fewer hours (even if that meant a loss of pay).

In 2019, 7% of men wanted to work longer hours, while 10% wanted fewer hours. For women, the figures were 9% and 11% respectively. 

So while a reasonable minority of employees would like to work fewer hours, the majority of employees would not want to work fewer hours if that meant less pay. But proponents of a four-day week argue that working shorter hours will help to increase labour productivity, which in turn will enable pay to increase to offset the impact on earnings of the reduction in working time. What evidence is there for this?

Figure 2: Output per hour and average weekly hours worked in European countries, 2019 (hover on each dot to reveal the country)

Source: Eurostat

What might be the impacts of a transition to a four-day working week?

Proponents of a four-day week argue that working fewer hours will help to boost productivity and hence wage growth. This productivity boost will initially ‘pay’ for the shorter working week. 

Cross-country evidence does suggest a negative relationship between hours worked and productivity (see Figure 2). But correlation does not prove causation, and the relationship in Figure 2 may reflect other factors, such as differences in industrial structure. 

There is no guarantee that working less will in itself raise productivity. Proponents sometimes cite examples from the past of manufacturing firms that did manage to secure productivity improvements following employer-instigated hours reductions. For example, Henry Ford and John Boot, of the Ford motor company and Boots the chemists respectively, were each instrumental in introducing two-day weekends for their employees during the 1920s and 30s.

But the fact that a manufacturing employer reducing the working week from six days to five managed to raise productivity does not necessarily mean that a service sector employer reducing the week from five to four days will achieve a similar result. 

Similarly, it is important to note that some firms that have experimented with a four-day week have combined that with less flexible working during those four days than they previously permitted under the five-day regime. One firm, for example, introduced fixed hours, in place of flexible hours, as part of the quid pro quo of moving to a four-day week.

What can we learn from the trials? The Icelandic trials, which ran between 2015 and 2019, covered 66 public sector workplaces within Reykjavík City Council and the Icelandic government. These were not strictly of a four-day week, but of reductions in the working week of between one and four hours with no loss of pay – with hours reductions often achieved through shortening meetings and longer coffee breaks. 

Because of the way in which weeks were shortened, the reduction in hours was achieved without any loss of output or service quality, according to the main evaluation report, therefore ‘raising’ productivity at the same time as workers’ perceived wellbeing (Haraldsson and Kellam, 2021). This clearly provides some evidence of beneficial impact. Importantly, the trial did not include schools, hospitals or the private sector, but focused largely on relatively small hours reductions in office-based workplaces.

In a number of sectors, particularly health, social care, education, personal services and the arts, the opportunity for productivity improvements is likely to be limited. The scope for musicians to perform more concerts, for hairdressers to cut more hair, for nurses to care for more patients or for teachers to teach more children (without increasing class sizes) is clearly constrained. Where this is the case, there are two possible implications: for funding; and for labour supply.

Reducing working hours without commensurate increases in productivity – and without loss of pay – is likely to mean reduced profits or increased public funding. If the scope for productivity improvements in publicly funded services like health or education is limited (which seems a reasonable assumption, unless we are prepared to accept the outcomes of larger class sizes, for example), then a transition to a four-day week could raise payroll costs significantly. There may be benefits to a four-day week, but would they justify these sorts of costs?

Shorter working weeks would also pose challenges in relation to labour supply. For example, if doctors were to work shorter weeks – assuming (very reasonably) that their productivity won’t increase proportionately – more doctors would need to be employed to make up the shortfall in hours, at least in the short term. With existing staff shortages in the National Health Service (NHS), this would be a significant challenge.

In fact, there is some evidence on the challenges that a shorter working week might pose for an organisation like the NHS. When the WTD was implemented, there were concerns about the effects it would have on healthcare, particularly given the relatively long hours that doctors already tend to work. Implementation of the directive required the government to respond by recruiting more doctors – both through increased training and greater hiring from overseas – combined with reorganisation of working arrangements in hospitals. Further, implementation of the directive for junior doctors was delayed until 2004.

The WTD does appear to have reduced senior doctors’ work hours (Dolton et al, 2015), and improved doctors’ work-life balance (Lambert et al, 2016). Evidence on whether the changes the directive brought have benefited doctors’ health is less clear-cut (Rodriguez-Jareno, 2014). 

Equally, the fiscal costs to the public sector have been non-negligible – as a result of the fact that productivity cannot entirely offset reductions in hours. Further, the evidence on whether the reductions in working hours have improved outcomes for patients is mixed.

Doctors are more likely to think the directive has had a negative effect on patient care, and a majority believe it has a negative impact on continuity of patient care (Lambert et al, 2016). A government-backed review in 2014 found that while the directive had some benefits for patient safety and doctors’ wellbeing, it also limited time available for training doctors, could increase risk of errors as a result of increased handovers, and sometimes resulted in cancellation of clinics given enforced rest breaks (Independent Working Time Regulations Taskforce, 2014).

Takeaways and uncertainties

In many ways, the aspiration for a shorter working week is worthwhile. Reduced hours can help achieve a better work-life balance and reduce stress. 

There is certainly a role for public policy in supporting the transition to a shorter working week. It is likely to be difficult for individual firms to innovate in this space without exposing their businesses to substantial risk. The public sector can help firms to experiment and, in so doing, break down entrenched norms and expectations around working hours, which often form part of the barrier to reform.

This is why the proposed pilots in Scotland and elsewhere are welcome. To be worthwhile, these trials must test rigorously the hypothesis that shorter working hours can raise productivity. It will also be important for them to study variations in results by sector or task. The pilots should assess whether shorter working weeks improve or weaken the quality of service delivery. If the conclusion is simply that employees liked working fewer hours for the same pay, we will not have learnt much. 

Trials will also need to address some challenging issues around the equity of a transition to a four-day week, with no loss of pay, for those already working four days or fewer, who may end up on less than pay their colleagues whose hours have reduced.

Without meaningful results from the pilots, mandating a transition to a shorter working  week (with no loss of pay) would be a very risky policy. Funding challenges and labour shortages may well result. It is also not clear that a shorter working week in itself would address wider concerns around job or earnings insecurity.

Governments can do more to help those who want to transition to a different configuration of working hours realise this goal. That means introducing policies to boost productivity and hence wages, a continued focus on addressing low pay, measures to give employees greater control over hours to reduce insecurity, an enhanced social safety net (to reduce insecurity and make job transitions less daunting), and a reinvigoration of collaborative partnership working between employers, employees and representatives to agree and uphold working arrangements.

Where can I find out more?

Who are the experts?

  • Alan Manning
  • Stephen Machin
  • Richard Blundell
  • Nick Bloom
Authors: David Eiser and Mark Mitchell, Fraser of Allander Institute
Photo by .shock from iStock
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