Abstract: Changing Savings Behavior in Relation to Market Changes, Sweden c. 1900

Kristina Lilja

Abstract

Studies on British workers up to World War II show that they slowly adapted to new saving methods. Precautionary saving dominated, while saving for old age was unusual and grew first when old age pensions were introduced. This has been explained by workers having small and precarious surpluses. This paper concerns Swedish urban workers' saving habits. Data from probate inventories in 1900-1905 and the Cost of Living Investigation in 1913-1914 show two great changes between 1870 and 1914. Sickness and burial funds became common at the end of the nineteenth century, and there was a breakthrough for saving in life and endowment assurances in the beginning of the twentieth century. The first meant that precautionary saving was made easier, while the second indicates that saving for old age became more widespread even before the introduction of old-age pensions in Sweden in 1913. Still, savings were not enough for retirement in old age. Briefly, Swedish workers seem to have changed their saving habits at a quicker pace than did British workers. The results indicate that the development of working-class saving behavior could differ between countries and that it may be inappropriate to use the British example as the only benchmark.