Patterns of Inequality: Income Inequality, Homogamy and Social Mobility in Finland, c. 1700–2019

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Sammanfattning

This PhD thesis examines the patterns of inequality in Finland between c. 1700 and 2019. The study assesses the inequality of outcomes (income inequality), assortative mating (homogamy) and equality of opportunities (social mobility, parent-son). To reveal the long-run patterns, extensive tax and population datasets have been collected, analysed and new methodologies have been developed.

In the 18th century, Finland was a poor, agrarian and backward region where large social divisions existed between the landless and landowners. Owning land was the principal marriage strategy, as it offered opportunities to strengthen the position of a family in society. Success in these strategies could mean a considerably higher probability of surviving turbulent shocks and crop failures. Therefore, strict marriage patterns occurred, and the interests of family and local community superseded individual preferences. Intergenerational persistence was strong, especially in the landowning class.

However, social mobility mildly increased during the first part of the 19th century, when population growth together with the scarcity of proper land to cultivate hindered the odds that farmers’ descendants would remain in the landowning class. The diminishing odds of owning land led to increasing downward social mobility for those in the landowning groups. Gradually, as the downward mobility increased and strict marriage strategies still prevailed, a growing underclass formed during the late 18th and 19th centuries. At first, this increasing downward socio-economic mobility enhanced social mobility, however such a situation gradually reversed itself during the 19th century.

From the mid-19th century until the early 20th century, intergenerational occupational persistence and income inequalities drastically increased. This development was mainly the result of industrialisation processes as well as structural changes, as the first steps of modern economic growth benefited more the haves than the have nots. Moreover, rising income levels gave room for greater income inequalities than previously, when the average income level had been close to subsistence level. Industrialisation and modernisation also had an impact on marriage patterns, where minor weakening trends affected prevailing traditions. However, the industrialisation and urbanisation developed relatively slowly and their effects on marriage patterns were limited in the late 19th century.

In contrast, the 20th century can be characterised as a century of equalisation and development. Modernisation and changes in the social structure increased social fluidity, especially mobility from labour to white-collar occupations. Similarly, income inequalities diminished due to shocks to capital, institutional changes and the adoption of redistributive taxes and transfers. The gradual formation of the Nordic welfare state during the 20th century, and especially its expansion starting from the mid-1960s, increased social mobility and lowered income disparities. In addition, there is strong evidence that investments in public education enhanced opportunities. Although inequalities increased in the late 20th century, they only undid a small proportion of the earlier equalisation developments. This turn was mainly due to the combination of increasing capital incomes and decreasing tax rates at the top as well as the low educational attainment for boys from the labour class.

In a comparative perspective, the trends in income inequality follow relatively closely trends in other Western economies, although little evidence exists at an international level for the 19th century. Similarly, the patterns in social mobility show highly similar patterns in the Nordic cases (Finland and Norway) in the 19th and 20th centuries. In contrast, social mobility (father-son) diminished in the US and the UK during the 19th and 20th centuries. Overall, the 20th century was for the most part a century of ‘equalisation’ and development, as Finland surpassed a number of Western societies in many facets of social and economic measures and likewise became a relatively equal society. Notably, this development did not seem highly probable in the early 20th century, when the predominantly rural, poor and unequal region of Finland experienced catastrophic social divides.

The results suggest that inequality patterns are explained by multiple factors and the trends are hardly explained by any sole determinant. This PhD thesis shows that the inequality of outcomes (incomes) is closely connected with the inequality of opportunities (social mobility). Lastly, new research is needed to study the impact of the complex institutions as well as the mechanisms that transmit economic and social advantages and disadvantages through generations.
Originalspråkengelska
Tilldelande institution
  • Helsingfors universitet
Handledare
  • Saaritsa, Sakari, Handledare
  • Heikkinen, Sakari, Handledare
  • Jäntti, Markus, Handledare, Extern person
Sponsorer för avhandling
Tilldelningsdatum4 feb. 2022
UtgivningsortHelsinki
Förlag
Tryckta ISBN978-951-51-7031-6
Elektroniska ISBN 978-951-51-7032-3
StatusPublicerad - 2021
MoE-publikationstypG5 Doktorsavhandling (artikel)

Vetenskapsgrenar

  • 5202 Ekonomisk- och socialhistoria

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