Already for fifteen years, cross-disciplinary research has been conducted at the University of Jyväskylä by utilising centuries-old sailor recruitment data. Using this data, it has been possible to study how the implementation of technologies affects labour market and salary differences between professions. The data have also helped to chart the development of financial history in Finland and the Nordic region.
From sailing ships to processors
Professor of History Jari Ojala and Professor of Economics Jaakko Pehkonen have conducted research on financial history together since 2004.
“Even in the scale of history research, I found an exceptionally comprehensive source of comparable data, including in total 650,000 sailor recruitments from around the 1750s to the 1950s recorded in the national archives of Sweden and Finland,” says Professor Ojala.
In addition to recruitment data, the material used by Ojala and Pehkonen includes the hired person’s age, the length of recruitment, the salary and the job title. Such comprehensive material offers an exceptionally good starting point to monitor long-term salary development. This makes it possible to study how technological changes affect salaries and the structures of the labour market.
“New technologies shape the labour market as skills and competence needed in work change,” says Professor Pehkonen.
“As new professions emerge, there will be an excessive demand for labour in some jobs and a reduced demand in others as duties become mechanised.”
“It is typical that the relative salary level of the educated workforce rises as technologies change. In our sailor material this is described excellently when sailing ships were replaced by steamboat technology. In recent decades, the same phenomenon has been noticed in many fields as computer technology has become more common.”
“When studying the material, it surprised us how aggressive the change is at the beginning. However, after a drastic initial change the labour market stabilises in the long run,” Ojala adds.
From an agrarian Finland to the top of Europe
By observing long-term salaries and other financial data, it is possible to chart economic development in an era during which all kinds of information was not collected as much as in recent centuries. By studying such material the researchers aim to find the drivers of modern economic growth and additional information on how the economy works during periods of slower growth.
“From the perspective of world history, the growth period of the last hundred years has been exceptional.”
This has somewhat distorted the general image of economic growth. It is also important to understand the mechanisms of slow growth periods,” Ojala emphasises.
“We may easily think that everything that happens now is somehow new and unprecedented. By observing history it can be seen that many things may have happened in a similar way already earlier. This is not surprising because human character has not changed much over time. For example, financial incentives guide behaviour quite the same way they did a century ago,” Pehkonen says.
“At the same time, we have aimed to bring this data from a slower growth period of Finland to be comparable with other European countries. In terms of economy, Finland was reaching the leading European countries already in the 18th century but was left behind in the 19th century,” says Ojala, describing the preliminary results of the research project funded by the Academy of Finland.
Pehkonen, who is also participating in the project, explains further: “It was as late as in the 1990s when convergence – a faster growth rate in comparison to other countries – took Finland to the same income level with other Nordic countries.
According to an observation familiar from economic theory, it is easier for less developed economies to catch up with more developed ones because they are able to follow a path made ready by others.
Countries in the frontline of development must always make a new growth path that has never been trodden before.”
It pays to cross the borders of science
The cooperation between Ojala and Pehkonen started largely from their desire to conduct research together. Both researchers applaud their cross-disciplinary approach.
“This has been a kind of hobby for us” Pehkonen says. “Historic data is nice in that sense that is does not get outdated that easily. It enables this kind of long-term research to which you can return when other tasks so allow. In addition, historic data offers me, a labour market researcher, new tools to mirror the events of recent decades. This kind of research is inspiring, fruitful and fun.”
“I did not need to learn to be an economist and Jaakko did not need to become a historian,” says Ojala. “But of course we both need to understand each other’s fields quite extensively so that we can connect them. To start with, economic history is somewhere between economic science, history and social sciences. In this sense our cooperation is extremely natural. After fifteen years, the sailor material has started to be used up. However, it is not impossible to still find a new perspective and continue studying it.”