Savings banks and working-class saving during the Swedish industrialisation

Lilja, Kristina; Bäcklund, Dan

doi:10.1017/s0968565016000032

Cited by 6 publications

(3 citation statements)

References 17 publications

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“…Insurance saving also increased in sickness and burial funds as well as in industrial life insurances. For workers, precautionary motives seem to have been an important reason for saving (Lilja & Bäcklund, 2016;Sjöblom, 2016). Beyond these private forms of saving, there was still little of a public safety net, although this situation was starting to change.…”

Section: Swedish Workers' Living Conditions In the Early 1910smentioning

confidence: 99%

The necessity of small loans: the borrowing and lending among low-income earners in early 20th century Sweden

Kenttä

Lilja

Bäcklund

2022

The History of the Family

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It is difficult for households to match a low and fluctuating income with their expenditures. One short-term strategy for managing cash-flow problems is to turn to one's social networks for support. This article describes and analyses the borrowing and lending of small loans (corresponding to one-two days of pay) among lowincome earners and the role these loans had in the household economy. By analysing the detailed weekly reports in the Swedish cost of living survey 1913/14, it is possible to explain when and why households borrowed and lent. This was after a period of rising real wages in Sweden, yet surpluses were still small and a public safety net had only begun developing. More than half of the studied 118 workers and 105 lower officials, respectively, borrowed small sums. However, most just borrowed once or a few times over the year. To give a loan was less common than borrowing. Some lenders likely felt obliged to give loans to less well-off borrowers. Other households engaged in reciprocal borrowing and lending of small loans. Small loans were mostly used to handle income shortfalls and not expenditures shocks. Consequently, larger income fluctuations led to more borrowing among workers, unlike the level of household income. Being in a vulnerable position in the life-cycle with young children also increased the risk of borrowing among both workers and lower officials. However, income from adolescents did not seem to have mitigated cash-flow problems as older children increased household borrowing too. Lending declined after the start of WWI. This means that the source underestimates annual lending during peacetime conditions. However, the demand for loans remained largely constant, forcing workers in need to seek out other sources of credit. Still, households' social networks played an important part in an incessant struggle to make ends meet.

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Section: Swedish Workers' Living Conditions In the Early 1910smentioning

confidence: 99%

The necessity of small loans: the borrowing and lending among low-income earners in early 20th century Sweden

Kenttä

Lilja

Bäcklund

2022

The History of the Family

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“…Savings banks emerged in the 1820s under the impulse of philanthropic initiatives. Just like in the United Kingdom or Sweden, these institutions aimed at encouraging the workers to save (Kuusterä & Ahlholm, 1996;Lilja & Bäcklund, 2016). They met a relative success at first.…”

Section: Main Characteristics Of the Pre-industrial Finnish Economymentioning

confidence: 99%

“…First, savings banks could be found in many small towns across Finland. These institutions accepted small deposits remunerated by interest rates and encouraged longterm saving, especially for workers (Kuusterä & Ahlholm, 1996;Lilja & Bäcklund, 2016). In 1823 and 1825, two savings banks were founded in Åbo and in Helsinki.…”

Section: The Rise Of Banksmentioning

confidence: 99%

The evolution of credit networks in pre-industrial Finland

Dermineur

2021

Scandinavian Economic History Review

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This paper examines the specificities of interpersonal credit networks in both a rural and an urban setting in pre-industrial Finland. To analyse peer-to-peer lending, the article studies a sample of 1047 probate inventories from the town of Kristinestad and its surrounding rural area, the parish of Lappfjärd. These probate inventories feature more than 5000 credit relations between households for the period 1850-1855 and 1905-1914. This paper also concerns itself with the changes pertaining to the advent of banking institutions in the mid-nineteenth century. Traditional behavioural sciences argue that formal institutions replaced informal ones because they are more efficient, more inclusive, or both. No longer needed, informal institutions are supposed to have disappeared when formal ones emerged. But this argument does not consider the social contextor embeddedness, a term coined by Granovetterand the individuals evolving in it. Embeddedness does not disappear. Therefore, one may ask how banks penetrated communities and the credit networks that were already in place in order to supplant private lending. Tools from social network analysis help to draw insights into the features and changes pertaining to credit networks.

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