Savings patterns during Finland's industrial take-off: Helsinki 1850-1900: Savings behaviour in a society without public social security schemes

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This thesis analyzes household saving patterns during 1850-1900 in Finland’s capital city Helsinki by examining aggregate net wealth per age cohorts, as well as net wealth per social class - defined broadly as working, middle and upper class - for each age cohort. 1850-1900 corresponded to the first decades of Finland’s industrial revolution, and a phase when its credit market – and indeed Europe’s – was rapidly getting more sophisticated. The main data set consists of 533 deceased inhabitants of Helsinki that were probated during 1850, 1875 and 1900. I compiled the data solely for this study and it is previously unpublished. Lindgren’s (2002) method of inverted mortality ratios is used to reconstitute the estimated net wealth of Helsinki’s living population during these three years. The compiled data is tested against Modigliani & Miller’s “life cycle hypothesis of saving” (LCH). My findings overall validate my two hypotheses that neither aggregate nor class-segmented household saving patterns follow that predicted by the LCH, which is consistent with the results of several studies. I for instance find that most middle class and upper class elderly die with net fortunes, while most working class people – irrespective of their age - have no savings at all. There are however also significant numbers of poor middle and upper class citizens, while there are numerous workers ...