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Would British people (and the economy) be healthier if we worked a four-day week?

Professor John Ashton said this week that a four-day week would reduce stress levels and allow people to take more exercise and see more of their families. And it could be just what the doctor ordered for the economy, too

John Maynard Keynes may have been right when it came to showing how governments should intervene to prevent a recession turning into a depression, but he got one prediction wrong.

In 1930 he predicted that within a century we would live in "a new era of leisure", when we work just 15 hours a week but are eight times richer, thanks to technological innovation.

We are 16 years short of his deadline and seem further away from that than ever. Britons work 43 hours a week, while one in 25 toils away for over 60. But help is on hand.

Professor John Ashton, president of the Faculty of Public Health, said this week that a four-day week would reduce stress levels and allow people to take more exercise and see more of their families. Leaving aside the health arguments, is it workable? On the face of it, it seems madness. If we work one day a week less, we get paid 20 per cent less and so have 20 per cent less money to spend on goods and services. As till receipts go down, businesses lay off workers.

If we unpick that argument, it looks a little threadbare. Not everyone is in work. Some work fewer hours than they would like, while many work too long – something Professor Ashton calls "maldistribution".

People working a five-day week often spend longer in work, either because they fear that leaving on time would hurt their promotion prospects or simply because they have too much work to do. In other words, some are donating as many as 20 unpaid hours a week. That value is not going into the economy and in any event workers have less time to spend money. But many work fewer hours than they would like. An index of underemployment by Professor David Blanchflower, an expert on the labour market, shows almost one in 10 works less than they would like.

By effectively redistributing work away from those who are working too hard towards those who would like more work, one can address one of the yawning inequality gaps in the UK.

The big question is how to achieve that without it leading to a lot of people getting 20 per cent poorer. One problem with economics is that it measures what is easy to measure but ignores what it cannot.

The late US Senator Robert Kennedy put it best when he said that economics counts "air pollution and cigarette advertising... but not the health of our children".

Working fewer hours will, as Professor Ashton says, result in people leading more enjoyable lives with more time for leisure and family, something that is not currently accounted for. It will also lead to higher levels of happiness, which the Government is looking to measure.

There is evidence that shows economic benefits. The four-day week was actually tried out in the American state of Utah in 2008, when 18,000 of the state's 25,000 public sector workforce were put on a four-day week.

Andrew Simms, a Fellow at the New Economics Foundations, says that most said it made them more productive. Workplaces reported higher staff morale and lower absenteeism. Citizens said the quality of service went up.

But the killer economic argument is about productivity – the amount each person produces every hour. As Nobel laureate Paul Krugman said, productivity "isn't everything, but in the long run it is almost everything".

Employees may work hard, but they are not working well. The UK has among the lowest productivity rates in Europe. Moving to a four-day week would improve that for both those working too hard and those working too little.

But this change should not be attempted overnight. There are real concerns for people who are having to meet the rising cost of housing and living.

The Jimmy Reid Foundation think tank has suggested a 10-year transition to a 30-hour week that captures the benefits of changes in productivity and absenteeism. Over time, provisions of childcare and housing will adapt.

Or, as Keynes said: "When the facts change, I change my mind. What do you do?"

Phil Thornton is a freelance writer and author of 'Brilliant Economics' (Pearson)