7th Market Economy Colloquium: Realities and Challenges of Adopting a 4.5-Day Workweek

7th Market Economy Colloquium

Date and Time: June 20, 2025, 11:00 a.m.

Venue: Yeollim Hall

Topic: The Reality and Challenges of Introducing a 4.5-Day Workweek

Presenter: Gyumin Han, Research Fellow at the Center for Free Enterprise (CFE)

Discussants: Hyeokcheol Kwon, Director of the Free Market Institute; Iseok Kim, Director of the Market Economy Institution Institute; Jaewook Ahn, Chairman of the Center for Free Enterprise (CFE); Sung-no Choi, President of the Center for Free Enterprise (CFE); and five others

The Reality and Challenges of Introducing a 4.5-Day Workweek

Gyumin Han, Research Fellow at the Center for Free Enterprise (CFE)

The Rise of the 4.5-Day Workweek Debate

Discussion of introducing a 4.5-day workweek is spreading rapidly. Positive narratives such as “improving quality of life” and “addressing low birth rates” appear to be lending legitimacy to the policy. Across the political spectrum, the 4.5-day workweek is being actively discussed regardless of party affiliation, and public interest is also growing as pilot cases by some local governments and companies are being introduced. Expectations for a 4.5-day workweek are especially rising among younger people.

This trend is linked to the widespread perception, based on statistics, that Korea still has long working hours. According to OECD data, as of 2022, Korea’s average annual actual working hours stood at 1,901 hours, about 149 hours higher than the OECD average of 1,752 hours. However, this figure reflects the structural characteristics of Korea’s employment system, including a high proportion of self-employed workers and a low proportion of part-time workers, which limits the validity of simple comparisons. According to an analysis by the Korea Development Institute (KDI), when these structural differences are taken into account, Korea’s working hours are estimated at around 1,829 hours, and the gap with the OECD average narrows by about 31%.

Despite this complex background and reality, the discussion of a 4.5-day workweek tends to be driven more by optimism riding on public opinion and positive rhetoric than by careful examination. The institutional and practical foundations for such a system are not yet sufficiently in place, and there has been inadequate specific review of key issues such as sectoral disparities, productivity, wage systems, and the burden on businesses. A debate focused more on symbolic effects may instead widen the gap with reality and lead to confusion in the workplace. Therefore, discussions on reforming work systems, including reducing working hours, should not rely solely on visible public expectations. They must be preceded by careful, refined research and serious social deliberation grounded in accurate interpretation of the data.

A Contrast with the Introduction of the Five-Day Workweek

Korean society has already experienced a major change in labor institutions through the introduction of the five-day workweek. At that time, in order to realize the policy goal of expanding employment through “job sharing,” the effects on industry as a whole and on the broader social structure were analyzed from multiple angles, and ample preparation took place. Various stakeholders—including the government, labor groups, businesses, academia, and civil society—engaged in broad discussions on changes in productivity, wage systems, educational systems, and business operations resulting from the reform, thereby building social consensus.

Of course, it should never be overlooked that the early stage of implementation involved considerable pain, including increased cost burdens for businesses and operational disruptions at educational and medical institutions. However, through consultation between the government and stakeholders, gradual expansion of application, and flexibility in institutional design, the five-day workweek was eventually able to take root in society over time. After being piloted mainly in the public sector beginning in the early 2000s, the five-day workweek was gradually expanded to the private sector from 2004 in conjunction with the 40-hour workweek system, and it was fully implemented from 2011. This case, in which phased implementation was combined with the incorporation of feedback from the field, stands in contrast to today’s discussion of the 4.5-day workweek.

The Risks of Advancing Policy Without Adequate Preparation

The 4.5-day workweek differs from the five-day workweek in that discussion of the system is moving ahead without adequate preparation. The recent expansion of discourse around a 4.5-day workweek emphasizes only the direction of reducing the number of working days, relying on superficial social sentiment and public opinion, while precise analysis and social consensus regarding workplace confusion, cost burdens, and productivity changes remain insufficient. For the system to become firmly established, sufficient discussion, review, and phased design must come first.

Most concerning is the fact that Korea’s labor productivity remains at a low level. According to the OECD, as of 2022, Korea’s hourly labor productivity was $49.4 (PPP), ranking 33rd among 38 OECD countries. This is about 76% of the OECD average of $64.7 and shows a significant gap compared with major advanced countries such as the United States ($80.5), France ($69.4), and Germany ($72.8). If working hours are reduced without raising productivity, the result may simply be greater burdens on businesses and the economy as a whole.

The Limits and Risks of Generalizing Overseas Cases

There have also been attempts to justify a 4.5-day workweek based on international examples, but most of these cases remain very limited and experimental, making generalization difficult. Iceland, a frequently cited example, did not introduce the system nationwide; rather, it merely conducted reduced-work experiments centered on some public institutions. The experiment involved only about 1% of the total workforce, and it was never expanded across all industries afterward.

Belgium is also said to have introduced a system similar to a 4.5-day workweek, but in reality it is simply a compressed workweek premised on 10-hour workdays, and questions have been raised about its effectiveness, with participation rates remaining below 1%. Experiments conducted in Japan, the United Kingdom, and Spain have likewise mostly been selective arrangements limited to specific companies or industries, and their long-term effects have not been proven. In particular, generalizing short-term, event-like trials such as the Microsoft Japan case is difficult to regard as a sound basis for policy judgment.

Although these cases took place under conditions in which each country had different labor market structures, industrial characteristics, and levels of social consensus, it is highly risky to package them simply as positive examples and attempt to apply them directly to Korea’s reality. Selective experimentation and institutionalization are clearly different, and any attempt to pursue a 4.5-day workweek uniformly at the national level should be examined with great caution.

The Need to Create a Work Environment That Guarantees Autonomy

Institutional design that does not reflect realities in the field is bound to produce side effects. For example, in SMEs with tight staffing or in manufacturing sectors where shift work is essential, reducing working hours may directly lead to the need for additional personnel or to lower productivity. By contrast, in some high-value-added industries or remote-based sectors, implementation may be relatively easier. In this way, the acceptability and effectiveness of the system vary greatly depending on the industry and working environment.

Attempts to push ahead with a 4.5-day workweek in a uniform manner carry a substantial risk of holding back both businesses and workers. Creating a flexible labor market is a more realistic solution than trying to apply a 4.5-day workweek uniformly across all industries. The forms and conditions of work differ greatly depending on the industry, job, and work environment, and trying to force them into a single framework creates confusion in the field. Therefore, what matters is not institutionalizing a 4.5-day workweek itself, but creating an environment in which such a choice is possible.

The Need for Institutional Discussion Based on Industry-Specific Realities

Businesses and workers should be allowed to autonomously adjust the number of working days and working hours according to their own circumstances. The legal and institutional framework should support the practical operation of diverse arrangements such as flexible work schedules, selective working hour systems, and remote or hybrid work, while moving in the direction of minimizing unnecessary regulation. In particular, President Lee Jae-myung also pledged during his presidential campaign to improve the institutional framework for selective working hour systems and flexible work hour systems and to expand flexible work arrangements. This raises expectations that institutional reform can proceed in a direction that respects autonomy and diversity in the labor market.

A uniform institutional approach should be avoided. Attempting to apply a system such as the 4.5-day workweek identically to all industries and occupations fails to reflect reality. Each industry differs in work intensity, work density, and methods of responding to consumers, and companies also vary greatly in size and organizational structure. If a single system is pushed through uniformly, it will instead distort realities on the ground and increase confusion. Institutions are more sustainable when they operate through choice rather than compulsion. True reform means leaving room for market participants to make their own judgments and adjustments.

It Is Time to Think About a Structure That Allows Autonomous Adjustment of Working Hours Within the Market

We should be alert to the danger of the 4.5-day workweek being consumed as a mere trend of the times or a symbolic slogan without sufficient discussion and preparation. In particular, it is troubling that the abstract slogan of “improving quality of life” is being used as justification for introducing the system. Quality of life is not a concept that the state can unilaterally design; it is something defined in diverse ways according to each individual’s values and life circumstances. Simply reducing the number of working days does not automatically lead to a better life, and an ill-prepared institutional rollout may instead make people’s lives more unstable. Genuine improvement in quality of life must begin with an environment that guarantees choice and flexibility. Real change comes from institutions that can ensure both autonomy and efficiency, and from a flexible market environment in which such institutions can actually function. It is time to consider a structure in which autonomous choice and adjustment are possible within the market.

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Original title: 제7회: 주 4.5일제 도입의 현실과 과제

Author: Market Economy Colloquium

Date: 2025-07-03

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=collo&pn=1&idx=27861