Determinants Of Financial Well-Being Among Married Individuals In Indonesia Based On Financial Product Inclusion: Evidence From IFLS-5

Abstract

Financial product inclusion is an important agenda for welfare equality, yet the relationship between access to financial products and the financial well-being of married individuals requires a more specific explanation. This study aims to analyze the effect of financial product inclusion on the financial well-being of married individuals in Indonesia using two indicators: economic status level as an objective measure and life satisfaction as a subjective measure. The data were drawn from the fifth wave of the Indonesia Family Life Survey in 2014, covering 2,225 observations of married individuals. The main variables include loan amount, pension fund, government health insurance, and cooperative participation, with controls for age, gender, residential area, education, home ownership, electricity access, ownership of a certificate of poverty, and individual consumption expenditure. The analysis employed ordered logit and probit models with marginal effects. The results show that loans, pension funds, and cooperatives significantly increase the probability of being in a better economic status, while government health insurance is not significant for this indicator. For life satisfaction, pension funds and government health insurance have significant effects, whereas loans and cooperatives are not significant. These findings indicate that financial products perform different welfare functions across objective economic and subjective satisfaction dimensions.