This study presents the new Gini coefficient and top income share series for Finland in the years 1865-1934 by utilizing Finnish tax statistics, which provide data on a poor country on the threshold of modern economic growth.Income inequality was relatively moderate in 1865, while famine (1867-68) decreased it further. Income inequality increased substantially during the late nineteenth century, then declined during WWI and its aftermath, followed by another increase in inequality in the late 1920s that was halted by the Great Depression. The rising level of inequality before WWI fits well with the ideas of the Kuznets curve and maximum inequality, whereas the decline in inequality was due to shocks (e.g. civil war).
This article examines consumption in Finland in the late nineteenth and early twentieth centuries. The emphasis of the article is on worker households, the consumption of which is described on the basis of household-budget studies. Long-term macro time-series are used to check the views derived from cross-sectional consumption enquiries. These two kinds of data are compared also by comparing the income elasticities of consumption. It is shown that the Finnish consumption structure was at the turn of the century quite traditional, food and other necessities making up the major part of consumption. Modest change towards a somewhat more diversified consumption had, however, already taken place. Furthermore, the inner structure of the broad categories of consumption had also changed. The development of consumption supports the assumption of rising living standards.
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