Investment in human capital
The level of investment in human capital has often been seen as an important dimension of standard of living, and some measure of educational level is usually included in the indices of standard of living, such as the Human Development Index.
The level of literacy in Sweden in 1800, as measured by writing ability, was 10—30%; by 1900 it was over 90%. The increase was rather modest in the beginning, but it accelerated considerably after 1850 (see Johansson 1977), partly as a result of the introduction of compulsory education in 1842. A more detailed study of Scandia, however, has shown marked discontinuities in the development of literacy in the early nineteenth century, when the level of writing ability varied with economic cycles (Nilsson and Svard 1994). This study also clearly demonstrates the marked social differences in writing ability in this period. About half of the male freeholders could write; only 10% of the landless could. Moreover, there were also considerable regional differences between peasants in the commercialized areas of southwestern Scandia and the more peripheral regions of the northeast. Thus, in the late eighteenth century freeholders were demanding writing skills and mustering the necessary resources to make the investment, while it was not until the second half of the nineteenth century that most landless labourers learned to write. This seems to indicate that the development of literacy corresponds fairly well with the development of real incomes in the different groups.2.4