UI Academics: Women's Saving Behavior Tends To Fade When They Become More Prosperous

JAKARTA - The Institute for Community Economic Research, Faculty of Economics and Business, University of Indonesia (FEB UI) mentioned that empowering women is the key to being better financially wise in low-income households.

"One of the benefits of women's empowerment that has been supported by several studies is that women who are more empowered in society will produce better household financial decisions," said LPEM FEB UI researcher Sulistiadi Dono Iskandar in his statement, quoted from Antara, Friday, May 28. .

This is especially important during the COVID-19 pandemic, when people easily experience loss of sources of income due to restrictions on activities. The people's saving behavior is very important in order to avoid financial disruptions that change household life.

This is in accordance with a study conducted by LPEM FEB UI, in the second session of the Public Webinar Development Study Forum (FKP) with the Community Economic Research Institute, Faculty of Economics and Business, University of Indonesia (FEB UI) entitled "Indonesian Household Saving and Banking Behavior".

Then, Sulistiadi Dono Iskandar (LPEM FEB UI) and Faradina Alifia Maizar (LPEM FEB UI) explained the results of their study entitled "Listen to Your Wife When Making Decisions regarding Saving: Women's Negotiation Power and the Outcomes of Household Savings in Indonesia".

The study results show that overall household savings will increase by 24 percent if the wife is involved in the decision-making process. Based on income levels, the effect of the wife's involvement in saving decisions tends to be higher for lower-income households and less for higher-income households.

"The saving behavior of women tends to fade when they become more prosperous," said Sulistiadi.

Sulistiadi added that these results can become the basis for the Indonesian Government to promote more programs that can increase women's bargaining power, such as programs that allow women to have access to the labor market or receive higher education.

Sulistiadi further explained that based on the literature, middle to lower income households tend to be more financially wise.

This is particularly evident from the microfinance literature, where various microfinance models currently target middle and lower class women because they are more risk averse and therefore more financially responsible.

"What is interesting is why this does not happen for high-income households, why the prudential behavior of wives disappears when household income is high. For that, further studies are needed," he said.