Essays on Structural and Technological Change

The Economic and Political Impacts of Structural Change

In his first two essays, Aapo Stenhammar focuses on Finland's transition from an agricultural society to a service society by examining the economic and political impacts of the 1969 Field Reservation Act. This act allowed farms larger than two hectares to cease operations in exchange for compensation, aiming to address the problem of agricultural overproduction. The study found that farmers who chose the field reservation did not move to cities but stayed on their farms. A more significant impact was observed on the children of these farmers: they attained higher levels of education, moved to cities at a younger age, and earned more as adults compared to their peers. 

In his second essay, Stenhammar focuses on the political consequences of the Field Reservation Act. In the 1970 parliamentary elections, Veikko Vennamo's Finnish Rural Party (FRP) achieved an unprecedented electoral victory. The research demonstrates that the number of field reservations directly influenced the rise in FRP's support. Stenhammar proposes two reasons for this increase: the farmers' identity and the negative external effects of the field reservations. 

For the study of the Field Reservation Acts, Stenhammar scanned over 300,000 forms from the 1969 agricultural census from the National Archives, which he digitized using an AI application he developed. He was able to link this agricultural census data to comprehensive individual-level registers from Statistics Finland, utilizing quasi-experimental designs to study causal effects. 

In his third essay, Stenhammar, along with Johannes Hirvonen and Joonas Tuhkuri, investigates how technological investments affect the workforce of industrial companies. The study found that these investments do not displace workers; on the contrary, companies that invested in technology increased their workforce. The skill requirements did not change either, suggesting that investments did not reduce jobs for lower-educated, manual labour workers. Instead, companies aimed to grow by introducing new and better products to the market or expanding their production chains, rather than reducing costs. 

The dissertation provides valuable insights into how structural and technological changes impact individuals and society. The results indicate that while economic reforms can be beneficial in the long run, their short-term political and social impacts must be considered.

Contact Aapo Stenhammar

Email: aapo.stemhammar@aalto.fi
Homepage: www.aapostenhammar.com