Good for girls or bad for boys? Schooling, social inequality and intrahousehold allocation in early twentieth century Finland

Abstract

Apart from the commonly emphasized historical or cultural explanations, was there an economics behind the early, extensive schooling of girls in Europe’s Nordic periphery? This article analyses factors behind the emerging female majority in secondary schooling in early twentieth century Finland through resource allocation within households. We argue that a significant part of the female educational advantage can be explained with a classic unitary Beckerian schooling investment model. We apply an Engel specification widely used in development economics to a household budget dataset from the 1920s to estimate the effect of the age and gender of children on schooling investment across social groups. We find a pro-girl bias among households of low socio-economic status, explained primarily by the sizable penalty to boys caused by opportunity costs and expected returns. Worker boys could generate significant income from an early age, making their education initially expensive for cash-constrained families. Contrary to previous claims, the dropout rates of boys were also higher than those of girls. Together with a propensity to leave home earlier, this lowered the expected net returns to schooling. Meanwhile, the expansion of modern services created attractive job opportunities for secondary educated girls. We find no evidence of intrahousehold bargaining. The findings resemble certain cases in development economics and the economic history of advanced countries including the USA. Rather than matching with patterns of anti-girl discrimination in many developing countries, our results highlight the prehistory of the currently emerging pattern of female educational advantage—and male disadvantage—in OECD countries.