R ESULTS SUMMARY

This PhD thesis investigates the long-run patterns of inequality in Finland from roughly 1700 to 2019.

The inequality patterns are captured by examining income inequalities (1865–2019), homogamy in marriages (c. 1700–1910) and intergenerational occupational mobility (c. 1700–2000). It should be highlighted that researchers will encounter changes in the way income and occupations are defined and need to adequately account for methodological differences and many other data challenges when studying development patterns over a period of more than 150 years. Moreover, these challenges become even more pronounced when comparing Finnish development patterns with those in other countries. However, I am confident that we can reveal valuable trends and patterns even if the exact levels and comparisons between countries remain rather tricky. These observed inequality patterns and trends can be divided into the following six periods.

(1) In the 18^th century, Finland can be described as a poor agrarian region, where there was a relatively large social distinction between landowners and the landless. In addition, the odds of obtaining land to cultivate was relatively high for the descendants of farmers. Thus, social mobility was relatively low and the chances to ascend or descend the social ladder were scarce. Our results support the extant literature that owning land was crucial for families since it enhanced their material position and their status in the local community. Marriage patterns were strict, and heterogamous marriages did not occur very often.

Our estimates of income inequality start from the mid-1860s, which makes it impossible to make any solid claims about income inequality in the 18^th century or in the first half of the 19^th century. However, we have estimated the inequality possibility frontier (IPF), which observes the extent to which a low income level constrains income inequality in a society. In practice, this constraint was already in place during the mid-1860s when Finland experienced one of the last peacetime famines in Europe. Therefore, we can argue that the IPF curve set the maximum inequality possible within Finnish society already during the 18^th century. Based on this observation, we can argue that income inequality before the 1860s would have been close to figures for the 1860s or else less, but not significantly higher. In other words, income inequality in the 18^th century and the first part of the 19^th century were presumably relatively high by modern standards, however not as high as during the early 20^th century.

(2) Gradually starting from the late 18^th century, population growth and the rising scarcity of cultivable land diminished the possibilities for farmers’ descendants to obtain farmland. This resulted in greater chances for downward social mobility, with farmers’ sons often slipping into the labour class. In other words, social mobility increased. Although families’ marriage strategies remained

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relatively stagnant and strict in the years 1700–1910, the growing chances for downward social mobility made these arrangements between family lines more crucial. Indeed, marriages between landowners (upper classes and farmers) and the landless (tenants and labourers) were relatively rare.

However, we identified a few personal characteristics that made heterogamous marriages more likely:

young age or being an illegitimate child or a single mother.

(3) From approximately the mid-19^th century to the early 20^th century, the earlier processes of downward social mobility from the farmer class into labour class and the strict marriage patterns among landowners continued, which created a growing social underclass (landless). The overabundance of agricultural workers similarly hampered wage growth for them when the average income level started to grow due to mild steps taken towards industrialisation and modernisation. In addition, economic growth gave room for higher income inequalities (the IPF curve). This process widened the gaps between the haves and the have-nots, but it also began to weaken prevailing traditions. In more urbanised or industrialised regions, heterogamous marriages became much more common. Moreover, the probability for a heterogamous marriage increased when people migrated.

Lastly, heterogamous marriages increased in areas with seemingly weaker future prospects (with a higher share of poor relief recipients, Finnish-speaking population and those emigrating). To sum up, social mobility diminished and a great social divide existed between classes during the late 19^th and early 20^th centuries, although some indications exist that heterogamous marriages started to become slightly more common at the time.

(4) In contrast, the first three quarters of the 20^th century were a time of turbulent shocks but also a time of development and equalisation. It is evident that intergenerational occupational persistence as well as income inequalities drastically declined. Top incomes and wealth suffered heavily from shocks to capital (the brutal civil war of 1918, high inflation in 1915–1921, WWI, WWII). In addition, many institutions experienced changes that caused them to become more redistributive, especially with respect to taxes, social transfers and education. Income taxes rose especially during and in the aftermath of the world wars as well as during the expansion of the welfare state beginning in the mid-1960s. The emergence of the Nordic welfare state dramatically amplified the redistributive role of taxes and social transfers. Moreover, the great reforms and expansion of education that had begun somewhat during the 1920s accelerated after WWII and particularly as a result of the comprehensive school reform carried out in 1972–77. Thus, Finland transitioned from being a low-income rural nation to being a high-income and highly developed Nordic welfare state during the 20^th century. The modernisation process, economic development and significant changes in population structure clearly opened new opportunities for the descendants of those in the labour

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class and farmer class to pursue white-collar occupations. Indeed, the chances for equal opportunities massively improved.

(5) During the last quarter of the 20^th century, the equalisation trends halted and, in many respects, reversed themselves. Income inequalities widened during and in the aftermath of the harsh depression of the early 1990s, and the social fluidity diminished; however, the reversing trends did not manage to change the overall picture of equalisation throughout much of the 20^th century. The rise in income inequalities was mainly due to increasing capital incomes for those in the top income groups as well as partly due to the diminishing redistributive role of taxation. Growing income inequality seemingly developed along with a weakening of social mobility, especially for those from the labour class desiring white-collar occupations. Remarkably, this worsening of equal opportunities occurred only in the parent-son linkages and not in the parent-daughter linkages.

(6) However, income inequalities have remained relatively stable in the 21^st century.

Unfortunately, we do not yet have data on social mobility or heterogamy in the 21^st century, but soon proper data will be available on the birth cohorts born in the 1990s. This period is quite interesting since Finland has experienced many turbulent shocks, including the harsh depression of the early 1990s, recession in the early 2000s (dot-com bubble and Nokia crisis), and a long-lasting recession after 2008 (financial crisis of 2008–2009), which resulted in slow growth and relatively high long-term unemployment levels in the 2010s. Moreover, Covid-19 can strongly affect especially younger birth cohorts who do not receive enough support from their families. Presumably, the effect of these shocks on social mobility is notable, but the overall level has yet to be revealed.

In sum, at the start of the research period Finland was an undeveloped, rural and highly unequal region in the northern part of Europe. Marriage patterns were quite homogamous in agrarian Finland. The absolute homogamy percentages were 72% in 1700–1860 and 59% in 1861–1910, which were remarkably high compared with today’s rate of 40%.³² In Finland, the educational as well as occupational homogamy between spouses is among the lowest in the studied countries (e.g. Domański and Przybysz 2007; Mäenpää 2015). Similarly, intergenerational persistence and income inequalities were quite high and at relatively similar levels compared with other Western countries in the late 19^th and early 20^th centuries, whereas currently Finland scores as one of the most equal countries in the world on these metrics. To illustrate this transformation, for example the top one percentile’s share of total household incomes dropped from roughly one quarter in 1900 to roughly one tenth in the 2000s.

32 Recent studies on homogamy are using the following four status classifications: upper white collar, lower white collar, farmer and manual labourer (Mäenpää 2015).

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