THE IMPACT OF DEMOGRAPHIC FACTORS ON HOUSEHOLDS’ SAVINGS IN MALAYSIA: A CROSS-SECTIONAL STUDY

Abstract

This paper examines the impact of demographic factors on savings using World Values Survey 7 (2017-2022) data on a sample household size of 1313 individuals. Descriptive analysis and generalized ordered logit regression (gologit2) was applied to analyze the data. Output from gologit2 analysis stated that; age, middle education level, private industry are having negative relationship with Savings, while income and employment status factors are having positive relationship between Savings. This study is consistence with the life cycle hypothesis theory which stated that; with increasing age, the saving level tend to reduce. Other than that, the results on income and savings relationship also provide confirmation to the permanent income hypothesis. The overall conclusion that can be established based on the results obtained is in the future, the government should give focus on the household with significant demographic results as documented in this study, in the mission to increase household saving. Through guided action, the targeted objectives have higher inclination to be successfully achieved. The cross-sectional data for this study, which spans the years 2017 to 2022, limits its applicability. It would be preferable if the surveys were collected annually. Furthermore, the data in this study are limited as they cannot be combined with demographic and macroeconomic variables to provide a more comprehensive picture of the study.