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Urban and Rural Household Saving Determinants in Indonesia (IFLS 2000–2014)

In: Proceedings of the International Conference on Entrepreneurship, Leadership and Business Innovation (ICELBI 2022)

Author

Listed:
  • Syofriza Syofyan

    (Trisakti University, Economic Study Program, Faculty of Economics and Business)

  • Bahtiar Usman

    (Trisakti University, Economic Study Program, Faculty of Economics and Business)

  • Harmaini Harmaini

    (Trisakti University, Economic Study Program, Faculty of Economics and Business)

  • Litha Ardhiningrum

    (Trisakti University, Economic Study Program, Faculty of Economics and Business)

Abstract

The government’s ability to mobilize public savings is one of the financial system functions that should work well. The literature on economic growth theory suggests that changes in the saving rate will cause an acceleration (deceleration) of capital accumulation, increasing (decreasing) economic growth. National saving in Indonesia for the past two decades has stayed the same. Indonesia’s average savings-to-GDP ratio has also experienced a downward trend from 1998 to 2019. Differences in demographic and social characteristics, as well as differences in access to financial institutions in rural and urban areas, make this research necessary. This study aims to analyze the determinants of household savings in rural and urban areas. The data are from the 2000, 2007, and 2014 IFLS (Indonesian Family Life Survey) surveys. The OLS regression method is used by using dami variables and also conducting sub-samples. The results of this study indicate that the saving rate and amount of saving of households living in urban areas is always higher than those living in rural areas. The impact of income, demographics, and credit ownership is greater for households in an urban area. The availability of facilities or access to savings in urban areas should also be developed in rural areas to make access easier and the savings increase.

Suggested Citation

  • Syofriza Syofyan & Bahtiar Usman & Harmaini Harmaini & Litha Ardhiningrum, 2023. "Urban and Rural Household Saving Determinants in Indonesia (IFLS 2000–2014)," Advances in Economics, Business and Management Research, in: Donard Games & Maruf (ed.), Proceedings of the International Conference on Entrepreneurship, Leadership and Business Innovation (ICELBI 2022), pages 93-106, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-350-4_10
    DOI: 10.2991/978-94-6463-350-4_10
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