3.1 Rapid growth and recession
3.2 Forests and brains as natural resources
3.3 Change in corporate structure
3.4 Internationalization
3.5 From tar to printing paper
3.6 A small, open economy
3.7 Standard of living

3.7 Standard of living

In the post-war decades through the 1970s, annual changes in consumption in Finland were steadily tied to real disposable income, since borrowing was tight and the growth in consumption has roughly paralleled the national income. Over the past century, both national income and growth in consumption have grown by an annual average of nearly three per cent. The structure of consumption has completely changed, though. In 1900, the average family spent more than half of its consumption expenditures on food. Today that figure is just 20 per cent. Correspondingly, spending on transportation, cultural, recreational and educational services, and other leisure-related commodities has multiplied. Altogether such expenditures outweigh those on food, beverages and other consumables. Essential commodities have been replaced by travel, communications and personal services -- in particular, cars and foreign travel.

Exports and investments dominated Finnish economic and fiscal policy for decades. The consumer explosion of the 1980s may have been partly rooted in this phenomenon. Bottled-up consumer pressures were released, as the income level finally approached that of the other Nordic countries.

One of the key indicators of a higher standard of living is shorter working hours and increased leisure time. Around 1900, the working day at Finnish factories averaged 10-13 hours. In 1917 a law was passed limiting the work day to eight hours. This change clearly improved the quality of life, providing greater liberty from the limits imposed by paid work.

Since then, working hours have been continuously shortened. The working week was cut to 45 hours in the 1950s and to 40 hours in the '60s. In the '70s annual leave was significantly increased and in the '80s the working week for all employee groups was shortened to 37.5 hours. As a result, the Finns' annual working time is one of the world's shortest.