A major economy is poised to try out a four-day workweek. Here's what economists have to say about it.

March 29, 2021
A four-day workweek might not just be a dream sometime soon. (AP Photo/Mark Duncan)

A four-day workweek might not just be a dream sometime soon. (AP Photo/Mark Duncan)

Proponents of the four-day workweek scored a victory earlier this year when the Spanish government revealed plans to fund a trial of the long-debated policy as soon as this fall. 

An estimated 3,000 to 6,000 Spanish workers at private firms that opt-in to the study will have their work hours reduced from 40 to 32 per week while making the same amount of money. Leaders of the left-wing party Más País, which is pushing the EUR 50 million program that will subsidize wages, have said the trial can prove that "working more hours does not mean working better." 

While Spain will likely represent the first nation to test the policy on a national level, New Zealand's prime minister also said last year that companies should consider implementing four-day workweeks, and left-wing opposition parties in the U.K. and Germany have also endorsed the idea. 

Individual firms are interested as well. Microsoft Japan experimented with the idea in 2019, finding that it boosted productivity by 40%. Consumer goods behemoth Unilever, which controls brands like Dove and Lipton, is testing the idea with its New Zealand employees in a year-long trial that began in December. Smaller companies like fast-casual chain Shake Shack in the U.S. and digital marketing firm Awin in the U.K. have also unilaterally implemented versions of the four-day workweek. 

While these experiments are relatively small, the fact that politicians and corporations are even flirting with the policy marks a significant change, giving proponents of the four-day workweek hope that more breakthroughs are coming in the 2020s. However, economists and other social scientists are still divided on the policy — and a lack of large-scale quantitative studies means that big questions remain unanswered. 

A productivity win? 

While the basic tenets of economics say that working fewer hours would mean lower productivity, many proponents of the four-day workweek argue that is not necessarily the case. Some say that paying workers the same amount of money for fewer hours will even increase productivity, as laborers come into work better rested and more motivated. 

"Firms are only interested in the bottom line, and the bottom line is positive," said James T. Walker, the director of research at Henley Business School, a leading business graduate program associated with the University of Reading in the U.K. "There's a productivity win to reducing working hours." 

Walker authored a paper about the policy in 2019, alongside other researchers from Henley, based on a survey of more than 500 U.K. business managers, half of whom had implemented four-day workweeks. 

Among the businesses with four-day workweeks, 62% reported that their employees were more productive during four-day workweeks than they had previously been during five. The majority of these employers also found they were able to reduce turnover and cut spending on expenses such as utility bills. U.K. firms that have already implemented four-day workweeks were saving up to GBP 92 billion ($127 billion) as of 2019, the researchers found. 

But the paper comes with some caveats. Walker acknowledged that, since his research used companies that had already independently chosen to reduce working hours, the productivity benefits would not be the same if the four-day workweek were imposed across all companies and economies. 

"If everyone were to do it tomorrow, we wouldn't expect the same gains," he said. 

Daniel Hamermesh, a labor economist at Barnard College and the Institute for the Study of Labor who has examined four-day workweek proposals for decades, was skeptical of the Henley study due to its reliance on interviews with managers. He also took issue with the idea that workers could be more productive overall while working fewer hours. 

"If managers say something, I have grave doubts," he said. "I've learned to pay almost no attention to such studies." 

"To say that the total amount of output goes up, the total amount we produce goes up [with reduced hours], makes no sense whatsoever," he added. 

Since both the Henley study and Spain's upcoming trial rely on firms opting in to the four-day workweek, Hamermesh also believes that their results — even if they're promising — are not applicable to the broader economy. 

"Any comparison that comes out of this is not going to tell you anything about what would happen if we did this more broadly," he said of the Spanish trial. "The issue is, how do you get a truly random sample of companies that A) do it or B) don't do it? That's not easy." 

Work and leisure

Despite Hamermesh's belief that reducing working hours will necessarily reduce productivity and income, he believes that the four-day workweek could still be a worthwhile sacrifice in what he considers to be a work-obsessed culture. 

"It will reduce our living standards by some amount, and that's a choice we've got to make. Do we want more leisure?" he asked. "We cannot get more leisure and the same income." 

Benjamin Hunnicutt, a historian and sociologist at the University of Iowa who studies leisure and is an advocate of the four-day workweek, believes that more free time is necessary. He told The Academic Times that work has become "not so much a means to an end, but an end in itself."

But he is more optimistic than Hamermesh about the four-day workweek's effects on productivity. 

In Hunnicutt's telling, if people have longer weekends and more free time, they'll put their money into what he calls the "experience economy," which includes sectors such as tourism and fitness that sell time-consuming experiences over physical goods. This shift will, in turn, lead to economic growth in those sectors. 

This process, he said, will be supercharged because people value time-consuming experiences like travel even more after the coronavirus pandemic. 

"The income effect will be much stronger than the substitution effect," he said. "This is good economics."  

Karen Foster, a political economist and sociologist at Dalhousie University in Canada, supports Hunnicutt's theory of the experience economy, and said that prioritizing experiences over physical goods would also have environmental benefits. 

"It's something that would maybe also deal with how much stuff we're making and buying and throwing away," she said. 

But despite her support for the policy, Foster admits that there's little quantitative evidence for the four-day workweek beyond studies of individual firms. "Most of the stuff I'm finding is theoretical," she said.

'Nobody remembers a time before the 40-hour week'

Advocates of the four-day workweek in government and the private sector often frame their interest in the policy in uniquely 21st century terms, referencing the upheavals of the coronavirus pandemic, climate change, the proliferation of gig work and the specter of automation. 

But current enthusiasm for the policy really represents the revival of an old idea — that human progress can mean working less — that was once embraced by leaders such as Richard Nixon and John Maynard Keynes, and was kept alive for decades in academia by people like Hunnicutt and Foster. 

Working hours in the U.S. declined dramatically in the century leading up to the 1930s due to union activism and anti-child labor laws, as well as visionary industrialists like Henry Ford, who moved his workers from a six-day to a five-day workweek more than a decade before the 40-hour workweek was codified into federal law in 1940, saying it made his factories more productive. 

Figures like Keynes and Nixon expected the decline to continue as technology made workers more productive on a per-hour basis. In 1930, Keynes predicted that his grandkids would work 15 hours per week and enjoy a five-day weekend. On the front page of a 1956 edition of The New York Times, Richard Nixon declared that a four-day workweek was in the "not too distant future."

"Until the first two or three decades of the 20th century, working hours were cut virtually in half," said Hunnicutt. "No one really thought the process would end."

And yet it did. After World War II, hours remained relatively stagnant in the U.S. and Europe, even as women entered the workforce in droves and expanded the workforce.

"Nobody alive today really remembers a time before the eight-hour workday and the 40-hour week," said Foster. "We take it for granted as something that's always been that way."

At this point, the convention of the 40-hour workweek is deeply ingrained as a political and social norm, shaping other parts of society like child care and compulsory school, which Foster said may limit people's ability to imagine a different future. 

"After the eight-hour workday was won, a whole social structure built around that," she said. 

The pandemic and the path forward

The coronavirus pandemic and the proliferation of work-from-home policies have changed peoples' attitudes toward work, potentially increasing their willingness to ask big questions about the future of labor. For many, the idea of working less may seem like less of a reach than it did two years ago. 

"In being forced to slow down, people are realizing that it's nice to have more time to do nothing or to do what you want," said Foster. "There's a realization that this is a moment when you can change a lot of things." 

Foster believes the labor battles that led to the five-day workweek in the early 20th century could be replicated a century later to further reduce working hours. 

"There's no reason why there couldn't be a struggle and a campaign to get it down to a four-day workweek," she said. 

But others, like Walker, see a more employer-driven path forward, in which companies that implement four-day workweeks see the advantages of higher productivity and lower employee turnover, spurring other firms to implement the policy in the future. They do not necessarily see a four-day workweek being implemented across the entire economy. 

"I'm being a bit more nuanced by saying, it doesn't work for everyone," said Walker, pointing to the example of health care, where he says six-day weeks are currently typical. 

Hunnicutt predicts that, absent government regulation to reduce working hours, employers will still be pressured to reduce work hours to attract younger workers, who will more highly value their free time after the pandemic. 

"There will be a dynamic in the marketplace where people who do have jobs will begin to pressure the economy, to go to these jobs that offer a mixture of wages and hours that they prefer," he said. "As culture changes, the economy itself will begin to respond." 

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