Research project: Beyond virtuous circles: A new economic history of human development in Finland, 19th-20th c. // Hyvän kehien takana: Inhimillisen kehityksen uutta taloushistoriaa Suomessa 1800- ja 1900 -luvulla

Below, you can find a brief description of my Academy of Finland Research Fellowship project, which I am implementing alongside my associate professorship in social history in 2017-2022. You can follow my publications and other activities at the University of Helsinki’s research database, where you’ll find full contact details.

I am also acting as a strand leader in the consortium “Work, Income and Public Policy” funded by the Strategic Research Council of the Academy of Finland (2018-2021).

Ohessa lyhyt kuvaus tutkimushankkeesta, jota toteutan akatemiatutkijana sosiaalihistorian apulaisprofessuurini ohella 2017-2022. Voit seurata julkaisujani ja aktiviteettejani Helsingin yliopiston tutkimustietokannasta, josta löydät myös täydelliset yhteystietoni.

Toimin myös lohkon johtajana Suomen Akatemian Strategisen tutkimuksen neuvoston rahoittamassa “Työ, tasa-arvo ja julkisen vallan politiikka” -konsortiossa (2018-2021).

Akatemiatutkijan hankkeen suomenkielinen tiivistelmä:

Hanke tutkii inhimillisen ja taloudellisen kehityksen vuorovaikutusta Suomessa pitkällä aikavälillä alueellisen, tilastollisen analyysin avulla. Pohjoismaisesta hyvinvoinnin ja talouskasvun ”hyvän kehän” kertomuksesta poiketen Suomi oli teollistumiskaudellakin heikon elintason, koulutuksen ja terveydenhoidon maa. Olivatko köyhyyden väheneminen, terveyden koheneminen ja koulutuksen paraneminen kasvun syy, seuraus vai kumpaakin eri aikoina? Paikalliset indikaattorit mahdollistavat aikasarjojen rakentamisen 1800-luvun lopulta alkaen esimerkiksi imeväiskuolleisuudesta, sairastavuudesta, sukupuolieroista kuolleisuudessa, sosiaaliturvasta, koulunkäynnistä ja BKT:sta eri osissa maata. Historiallinen kotitalousbudjettiaineisto mahdollistaa mikrotason analyysin kotitalouksien
panostuksista jäsentensä ravintoon, terveyteen ja koulutukseen ennen hyvinvointivaltiota. Tutkimus kyseenalaistaa ”hyvän kehän” ja rakentaa pitkän aikavälin näkökulmaa yhteiskunta- ja kehityspolitiikan avainkysymyksiin.

Abstract of the Academy of Finland Research Fellowship:

The project studies the long-run relationship of human and economic development in Finland through a regional, quantitative analysis. Contrary to the Nordic narrative of a “virtuous circle“ of welfare and growth, in Finland low standards of living, education and health care persisted into the period of indistrialization. Were poverty reduction, improvements in health and increases in education causes or consequences of growth, or both at different times? Local indicators enable constructing time series from the late 19th century onwards on, e.g., infant mortality, morbidity, sex ratios in mortality, poor relief, schooling, and GDP in different parts of the country. Historical household budget data makes it possible to analyze the investments by households into the nutrition, health and education of their members before the welfare state. The project questions the “virtuous circle” and constructs a long run perspective on key issues of economic, social and development policy.


This project aims to construct a new generation analysis of the historical interrelationships of human and economic development in the case of Finland. The goal is to introduce a human development component, expressed through measurable indicators on health, education and income/nutrition, both as a consequence and a cause into the economic history of Finland. The approach builds on several evolving research literatures: work analyzing the historical microdynamics of income and well-being with econometric methods; work building global comparisons of historical development indicators between societies and regions through construction of databases and measures like the Historical Human Development Indicator; and work emphasizing historical context and the contingent nature of development.

Narratives on Nordic societies tend to present their success as a result of conscious strategies, where equity, welfare and economic growth formed virtuous circles giving birth to a development model for the rest of the world to follow. In the case of Finland, this interpretation is empirically problematic. For instance, the country had very low levels of education up until the 1950s, catching up with Western Europe in terms of years of schooling only in the 1990s.[1] Life expectancy actually declined in relation to Western Europe in the early 20th century, and particularly adult health was neglected  into the 1960s.[2] While Sweden embarked upon building a “people’s home” from the 1930s, Finland stuck to residual welfare policy and classical liberalism.[3] Still, an economic catch-up did take place already from the early 20th century onwards. What really was the role of human development in Finnish success? Existing historical research has not managed to raise or address this dilemma, which is critical also in terms of lessons to current economic and development policy.

The relationship between human and economic development is internationally a busy frontier of research. A growing number of cliometric works show how health, education and income have all mutually determined each other in different contexts in the 19th and 20th centuries: How urban water purification led to more education and higher incomes in the US[4], how higher incomes enabled attaining lower mortality after controlling for sanitation in Paris[5], and how primary schooling spread basic disease avoidance behavior in postwar developing countries[6].

However, many findings by historians are at odds with narratives of straightforward linear progress. Counterintentional effects – for instance, public schooling drives motivated by nationalism rather than human capital accumulation[7], medical improvements based on wartime resource mobilization[8], or public health dividents from attempts to protect the elite from disease[9]  – may have contributed to critical junctures[10] making the difference between progress and decline. Temporal discontinuities have been pointed out. Returns to human capital were low during the early industrial era of “braw” rather than “brain” jobs, making the question of what actually triggered demand for skill central.[11] Advances in human development indicators may have been driven by different factors in different contexts: global growth regimes, available technologies or varying state enthusiasm to intervene.[12] Development economists and economic historians have given attention to “poverty traps”, where current lack of resources prevents investment required for future productivity.[13] These may exist at national or regional as well as micro levels, giving rise to vicious rather than virtuous circles.[14]

In Finland, relevant strands of research have typically been disconnected. Economic growth has long been seen as a distinct quantitative field[15], while issues of welfare have been predominantly approached from poststructuralist or institutional perspectives[16], and development has been strictly associated with non-Western contexts in a separate policy-oriented discipline. In this fellowship, these elements are merged into a unified research program.

[1] Kokkinen 2012.

[2] Harjula 2012; Saaritsa 2016a.

[3] Kettunen 2001; Kalela 1987.

[4] Beach et al. 2014.

[5] Kesztenbaum & Rosental 2014.

[6] Riley 2008.

[7] Cvrcek & Zajicek 2013; Benavot & Riddle 1988.

[8] Laurent 2011.

[9] Costa 2013; Troesken 2002.

[10] Acemoglu & Robinson 2012, e.g., 106-110.

[11] Goldin 2014; Bleakley et al. 2013; Galor 2011.

[12] Prados de la Escosura 2015; Riley 2001; Crafts 1997.

[13] Possible causes include gender discrimination – sometimes within families – or child labour. E.g., Humphries 2010; Horrell, Humphries & Voth 1998; Klasen 1998.

[14] Duflo & Banerjee 2011; Sachs 2005.

[15] See e.g., the publications in the series Kasvututkimuksia / Studies on Finland’s Economic Growth of the Bank of Finland, esp. Hjerppe 1988. Historical SNA data is online via Statistics Finland; see .

[16] See e.g., Nordic Centre of Excellence: The Nordic Welfare State – Historical Foundations and Future Challenges (2007-2012),; Harjula 2015.