Exploring the link between saving behavior and subjective wellbeing in Indonesia: urban–rural and gender differential estimations

This study explores the impact of saving decisions on subjective well-being (SWB) – measured by self-reported happiness and life satisfaction – among urban and rural residents in Indonesia, with particular attention to gender-based differences. Drawing on nationally representative data from the Indonesian Family Life Survey 5 (IFLS-5), the study employs the Inverse Probability Weighted Regression Adjustment (IPWRA) method to produce robust and unbiased estimates. The main finding indicates that saving decisions significantly enhance household-level SWB. Disaggregated analysis by urban–rural location and gender yields nuanced insights. Disaggregated analysis by urban–rural location and gender yields nuanced insights. In rural areas, saving has a stronger and statistically significant impact on SWB, whereas the effect is comparatively weaker in urban areas. Gender-based analysis reveals that saving decisions improve SWB for both men and women. However, the positive impact is more pronounced among male participants, indicating gender disparities in financial behavior outcomes. These findings suggest that saving enhances perceived well-being, especially for rural residents and male household heads. These findings suggest that saving enhances perceived well-being, especially for rural residents and male household heads. The study underscores the need for policies that promote saving behaviors and financial inclusion, while also calling for further research into gender-based differences in the relationship between financial decisions and well-being.