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Self-efficacy and Savings Among Middle and Low Income Households

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Abstract

Based on Social Cognitive Theory, this exploratory study examined the relationship between self-efficacy and saving among a sample of middle and low income households. Logistic regression was used to test the hypothesis that higher levels of self-efficacy are associated with greater likelihood of saving when controlling for age and income levels. The results show that higher self-efficacy, older age, and middle incomes are associated with a higher likelihood of savings. When controlling for age and income, respondents with low self-efficacy were only 60% as likely to save as those with high self-efficacy scores. The results confirm that saving behavior is associated with general self-efficacy. Enhancing self-efficacy for middle and low income individuals may encourage saving. Implications of this research suggest a need for additional research to further explore this relationship and how it might be used to enhance outreach aimed at improving savings behavior.

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Notes

  1. Regression models including all independent variables of household size, age, gender, education, and income were tested to control for the effects. There was no significant difference found in the association between self-efficacy and savings. However, the total number in the analysis dropped from n = 826 to 273. Results are available upon request.

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Correspondence to Jean M. Lown.

Appendix

Appendix

General Self-efficacy Scale (Sherer et al. 1982)

1 = strongly disagree; 2 = disagree, 3 = mixed, 4 = agree, 5 = strongly agree

  1. (1)

    One of my problems is that I am not motivated to do work when I should.

  2. (2)

    I give up on things before completing them.

  3. (3)

    When trying to learn something new, I soon give up if I am not initially successful.

  4. (4)

    Failure just makes me try harder.

  5. (5)

    If I can’t do a job the first time, I keep trying until I can.

  6. (6)

    When I set important goals for myself, I rarely achieve them.

  7. (7)

    I avoid facing difficulties.

  8. (8)

    I am a self-reliant person.

  9. (9)

    I do not seem capable of dealing with most problems that come up in life.

  10. (10)

    When I decide to do something, I go right to work on it.

  11. (11)

    When I make plans, I am certain I can make them work.

  12. (12)

    When unexpected problems occur, I don’t handle them well.

  13. (13)

    I avoid trying to learn new things when they look too difficult for me.

  14. (14)

    If something looks too complicated, I will not even bother to try it.

  15. (15)

    I feel insecure about my ability to do things.

  16. (16)

    When I have something unpleasant to do, I stick to it until I finish.

  17. (17)

    I give up easily.

Reverse scored items: 1, 2, 3, 6, 7, 9, 12–15, 17

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Lown, J.M., Kim, J., Gutter, M.S. et al. Self-efficacy and Savings Among Middle and Low Income Households. J Fam Econ Iss 36, 491–502 (2015). https://doi.org/10.1007/s10834-014-9419-y

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