Estimating the Determinants of Saving Behaviour of Elderly and Workers: the Effects of Retirement Plan

• Main Author: Nur Hafizah, Ramli
• Format: Thesis
• Language: English
• Published: 2011
• Subjects: HG Finance
• Online Access: http://etd.uum.edu.my/3705/1/s804089.pdf; http://etd.uum.edu.my/3705/

Saving is an important indicator of economic development where it is viewed as an element of finance. This main objective of this thesis is to investigate the saving behavior of working and elderly. It is suggested that working people make saving compared to the elderly, which consistent with the life-cycle hypothesis theory. Besides that, the other objectives are to exam the effect on saving for people who have old age protection plans such as pension scheme, EPF and insurance scheme. In this thesis, the data are collected by survey interview. A total of 400 respondents were chosen by the nonprobability sampling design and they are interviewed by face to face. For statistical analysis, the saving behaviors are divided into two. First, the saving rate (which is modeled by multiple regression). Second, the probability of saving (which is modeled by logistic regression). Results of descriptive analysis show that in terms of percentage of savings (save or not), the workers are higher than the elderly. However, by level of education, more elderly have saving compared to worker. Results of multiple regression model suggests that the significant determinants of one’s saving rate are ethnic groups, level of education, income from business and level of incomes. Whereas, for probability of saving, the significant determinants are age, ethnic groups, level of education, working and insurances. Either descriptive statistics or the econometrics modeling, the saving behavior of working people and elderly are found to be different significant such that working people tend to save more than elderly. The policy implications and suggestions are discussed. For instance, policymakers should keep an eye on all of the significant variables of saving behaviours on formulating policies to encourage saving in Malaysia.