Would a four-day-week improve individual well-being? Evidence on working hours and life satisfaction from German panel data

Abstract

The four-day-week receives growing attention by companies, researchers, and governments. A core premise of the concept is that reducing working hours increases individual well-being. While trials in public and private organisations support this claim, empirical studies on the relationship between working hours and well-being do not offer conclusive evidence. This study contributes to the academic literature by analysing the effects of working around 30 hours compared to full-time work of around 40 hours. I estimate gender-specific fixed-effects panel models for the relationship between working hours and life satisfaction/relevant domain satisfactions using longitudinal data from the German Socio-Economic Panel (SOEP) for the period 2010-2019. The results imply that life satisfaction rises with increasing working hours, until a plateau is reached when working 28 hours and more. This suggests that more available time does not automatically lead to higher well-being and the premise of the four-day-week needs to be treated with caution. The analysis of domain satisfactions shows no significant effects of fewer working hours on family life satisfaction and gender-specific effects of working hours on work, leisure, and personal income satisfaction. This likely results from social norms and the gendered distribution of unpaid work. Overall, the findings on domain satisfactions imply that introducing a four-day-week at a national scale is promising, as it would redefine the income level and potentially transform social norms.