[2] Olsson was born in Köla parish, present-day Eda Municipality in the westernmost part of Värmland.

After finishing his schooling in Karlstad he became a student at Uppsala university in 1914, and studied literature, especially poetry, for Henrik Schück, Martin Lamm, and Anton Blanck.

In a book published by Olsson in the 1970s he recollected reading the news about Fröding's death in 1911, which had affected him strongly.

[1] In 1936, Olsson applied for the position as Professor of literature at Lund University, and his two former teachers Lamm and Blanck both supported his application.

In 1945, he was elected to succeed Lamm as Professor of literary history and poetics at Stockholm university, a position he remained at until his retirement in 1961.