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Moving Up the Savings Hierarchy: Examining Savings Motives of Older Malay Muslim

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Abstract

Continuation ratio analysis of data from the 2004 Economic and Financial Aspects of Aging in Malaysia was conducted to assess likelihood of Malay Muslims aged 55–75 moving up in a hierarchical model of savings motives. Results indicate that more than half of older Malay Muslim has no savings. Many are barely surviving economically. Family size, educational level, health perception, income quintiles and income adequacy were important predictors of advancing from a lower level to a higher level in the savings motive hierarchy. Saving for Hajj was an important self-actualization savings motive.

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Notes

  1. The Pilgrim Fund Board (Lembaga Tabung Haji) is an Islamic financial institution that manages Malaysian pilgrimages. The Board takes deposits as small as RM10 from its all Muslim membership for the purpose of saving to go to Hajj. The Board pays an annual dividend to depositors as interest is forbidden in Islam. For convenience and to encourage saving for such purpose, the Board offers flexibility and ease of deposit and withdrawal similar to that of banks either from its own branches or from participating banks that link to the Board such as the Islamic Bank and Bank Rakyat (translation: People’s Bank).

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Acknowledgments

The authors would like to thank the anonymous reviewers for their helpful comments and suggestions. Also, this study was made possible through the funding from the Ministry of Science, Technology and Innovation, Malaysia under the Eight Malaysia Plan’s Intensification of Research Priority Areas (IRPA) initiatives.

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Correspondence to Sharifah A. Haron.

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Haron, S.A., Sharpe, D.L., Abdel-Ghany, M. et al. Moving Up the Savings Hierarchy: Examining Savings Motives of Older Malay Muslim. J Fam Econ Iss 34, 314–328 (2013). https://doi.org/10.1007/s10834-012-9333-0

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