What would be the effects of a 34.5 hour working week in Denmark?

Denmark’s current economic policy is not sustainable if a trend to work fewer hours continues, but the government must decide how to tackle the problem, experts from the Danish Economic Councils (De Økonomiske Råd) say in a new report.

In their autumn report, the Economic Councils scrutinise the sustainability of existing economic policies if Danes, as has been forecast, use the country’s strong welfare provisions to spend more time off work in the coming years.

“An important question is whether present-day politicians should already be reacting now in response to the expectation that people in future will prioritise free time,” the senior member of the councils, Carl-Johan Dalgaard, said at a briefing on Tuesday according to TV2.

The shortage of labour in Denmark is a major political topic currently, with some quarters of the government joining business organisations in pushing for more foreign labour, while the Social Democratic party says it wants to engage more young people on the labour market.

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At the same time, Statistics Denmark has pointed out a trend in which increasing numbers of employed Danes are opting to work part-time instead of full-time. One in seven wants to reduce their current working hours according to the agency.

The report released by the councils on Tuesday includes calculations on how a reduction of the average weekly working hours will impact the public budgets.

In a scenario in which the average working time falls by 0.4 percent each year from 2031 onwards, resulting in a working week of 34.5 hours by 2050, existing economic planning would not be sustainable, the council found.

Those conclusions back recent statements by Prime Minister Mette Frederiksen, including during her speech at last week’s opening of parliament, in which she encouraged people in Denmark who are able to work full-time, to do just that.

“The public finances are quite sensitive to general changes in working hours among the employed,” the Economic Councils conclude in the report.

The consequences of this could be a degradation of quality in public services, unless the Danish public is willing to pay more in tax to offset the reduced revenue via work volume.

“It must then be up to future generations to decide what the consequences would be for private and public spending,” the Councils conclude.

While there is no official recommendation to respond to the trend currently, it could form the background to a political decision in future, it noted.

Denmark is currently among the top five countries in Europe for part-time work according to Statistics Denmark, with 25 percent of employed people between the ages of 15 and 64 working on a part-time basis.