A Comparison of Financial Well-Being and Its Antecedents Across Different Employment Categories in Malaysia

Nurul Shahnaz Mahdzan, Mohd Edil Abd Sukor, Rozaimah Zainudin, Fauzi Zainir, Wan Marhaini Wan Ahmad
(Submitted 5 April 2022)
(Published 5 September 2023)


This study compares the level of financial well-being (FWB) and its antecedents
(financial stress, financial behaviour, financial literacy, and the internal locus of control
(LOC)) across individuals of different employment categories in Malaysia. Second, it investigates the relationship between those antecedents and FWB and compares the differences in the strength. Data were collected from 1,867 respondents from four employment
groups using a questionnaire-based survey. Descriptive statistics and analysis of variance (ANOVA) were conducted to achieve the first research objective, and ordinary least
squares (OLS) regression was used to achieve the second research objective. The results
indicate that FWB and its antecedents of Malaysian employees vary considerably across
employment categories. The FWB of the unemployed and private-sector workers is significantly lower than their government sector and self-employed counterparts. Financial
stress, financial behavior, and an internal LOC are the most determinative of employees’
FWB, however, they have varying degrees of impact across different employment categories. The results relate to employers and policymakers in formulating strategies to promote
higher FWB among Malaysian employees, based on their employment categories.


financial well-being, financial stress, locus of control, financial behaviour, employment

Full Text: PDF

DOI: 10.22146/gamaijb.73947


Adamchik, V. A., & Bedi, A. S. (2000). Wage differentials between the public and the private sectors: Evidence from an economy in transition. Labour economics, 7(2), 203-224.

Afonso, A., & Gomes, P. (2014). Interactions between private and public sector wages. Journal of Macroeconomics, 39, 97-112.

Agarwal, P., & Sajid, S. M. (2017). A study of job satisfaction, organizational commitment and turnover intention among public and private sector employees. Journal of Management Research, 17(3), 123-136.

Ameriks J, Caplin A, Leahy J. (2003). Wealth accumulation and the propensity to plan. Quarterly Journal of Economics. 118, 1007–46

Ariff, M., & Abubakar, S. Y. (1999). The Malaysian financial crisis: economic impact and recovery prospects. Developing Economies, 37(4), 417-438.

Azman, F. (8 Feb 2021) 81 per cent of Malaysians worry about losing jobs due to COVID-19 - Survey, retrieved on 9th September 2021 from: https://www.astroawani.com/berita-malaysia/81-cent-malaysians-worry-about-losing-jobs-due-covid19-survey-281950

Bencsik, P., & Chuluun, T. (2021). Comparative well-being of the self-employed and paid employees in the USA. Small Business Economics, 56(1), 355-384.

Bordia, P., & Blau, G. (1998). Pay referent comparison and pay level satisfaction in private versus public sector organizations in India. International Journal of Human Resource Management, 9(1), 155-167

Brown, S., & Gray, D. (2016). Household finances and well-being in Australia: An empirical analysis of comparison effects. Journal of Economic Psychology, 53, 17-36.

Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-beingFWB: A conceptualization and research agenda. Journal of Business Research, 79, 228–237.

Buelens, M., & Van den Broeck, H. (2007). An analysis of differences in work motivation between public and private sector organizations. Public administration review, 67(1), 65-74.

Bullock, J. B., Stritch, J. M., & Rainey, H. G. (2015). International comparison of public and private employees’ work motives, attitudes, and perceived rewards. Public Administration Review, 75(3), 479-489

Burchell, B. (2011). A temporal comparison of the effects of unemployment and job insecurity on wellbeing. Sociological Research Online, 16(1), 66-78.

Chen, Z., & Jin, M. (2017). Financial Inclusion in China: Use of Credit. Journal of Family and Economic Issues, 38(4), 528-540

Chen, Z., & Lemieux, C. M. (2016). Financial knowledge and behaviors of Chinese migrant workers: An international perspective on a financially vulnerable population. Journal of Community Practice, 24(4), 462-486

Choi, Y. (2017). Work values, job characteristics, and career choice decisions: Evidence from longitudinal data. The American Review of Public Administration, 47(7), 779-796.

Ciobanu, A., Androniceanu, A., & Lazaroiu, G. (2019). An integrated psycho-sociological perspective on public employees’ motivation and performance. Frontiers in Psychology, 10, 36.

Demircioglu, M. A., & Chen, C. A. (2019). Public employees' use of social media: Its impact on need satisfaction and intrinsic work motivation. Government Information Quarterly, 36(1), 51-60.

Department of Statistics Malaysia (2021) Key Statistics of Labour Force in Malaysia, March 2021. Retrieved on 9th September 2021 from: https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=124&bul_id=Ty9BVWN6cUtkYnhrK0ZpMCtCL2NPQT09&menu_id=Tm8zcnRjdVRNWWlpWjRlbmtlaDk1UT09

Department of Statistics Malaysia (2021) Key Statistics of Labour Force in Malaysia, June 2021. Retrieved on 2 November 2021 at: https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=124&bul_id=SkFRMTJ0d1RIR3BrdG1aUTBsUmw2Zz09&menu_id=Tm8zcnRjdVRNWWlpWjRlbmtlaDk1UT09

Diener, E., Kahneman, D., Tov, W., & Arora, R. (2010). Income's association with judgments of life versus feelings. In E. Diener, D. Kahneman, & J. F., Helliwell (Eds.), International differences in well-being (pp. 3-15). Oxford, UK: Oxford University Press.

Falahati, L., Sabri, M. F., & Paim, L. H. (2012). Assessment a model of financial satisfaction predictors: Examining the mediate effect of financial behaviour and financial strain. World Applied Sciences Journal, 20(2), 190-197.

Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 39-50

Friedline, T., Chen, Z. & Morrow, S. (2021). Families’ financial stress & well-being: The importance of the economy and economic environments. Journal of Family and Economic Issues, 42(1), 34-51.

Guo, L., Arnould, E. J., Gruen, T. W., & Tang, C. (2013). Socializing to co-produce: Pathways to consumers' financial well-being. Journal of Service Research, 16(4), 549–563.

Helliwell, J. F., & Huang, H. (2014). New measures of the costs of unemployment: Evidence from the subjective well‐being of 3.3 million Americans. Economic Inquiry, 52(4), 1485-1502.

Hilgert, M. A., Hogarth, J. M. & Beverly, S. G. (2003) Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin, 89, 309-322

Hira, T. K. (2012) Promoting sustainable financial behaviour: implications for education and research. International Journal of Consumer Studies, 36,502-507

Hoeve, M., Stams, G. J. J. M., Van Der Zouwen, M., Vergeer, M., Jurrius, K., & Asscher, J. J. (2014, August 19). A systematic review of financial debt in adolescents and young adults: Prevalence, correlates and associations with crime. PLoS ONE. https://doi.org/10.1371/journal.pone.0104909

Hogarth, J. M., & Hilgert, M. A. (2002). Financial knowledge, experience and learning preferences: Preliminary results from a new survey on financial literacy. Consumer Interest Annual, 48(1), 1-7.

Hojman, D. A., Miranda, Á., & Ruiz-Tagle, J. (2016). Debt trajectories and mental health. Social science & medicine, 167, 54-62.

Huston, S. J. (2012). Financial literacy and the cost of borrowing. International Journal of Consumer Studies, 36, 566-572.

Johnson, P. F., Leenders, M. R., & McCue, C. (2017). A comparison of purchasing’s organizational roles and responsibilities in the public and private sector. Journal of Public Procurement, 3(1), 57-74.

Joo, S., & Grable, J. E. (2004). An exploratory framework of the determinants of financial satisfaction. Journal of Family and Economic Issues, 25, 25–50

Karl, K. A., & Sutton, C. L. (1998). Job values in today's workforce: A comparison of public and private sector employees. Public Personnel Management, 27(4), 515-527.

Kim, J., & Garman, E. T. (2004). Financial Stress, Pay Satisfaction and Workplace Performance. Compensation & Benefits Review, 36(1), 69–76. https://doi.org/10.1177/0886368703261215

Kim, J., Garman, E. T., & Sorhaindo, B. (2003). Relationships among credit counseling clients’ financial well-being, financial behaviors, financial stressor events, and health. Financial Counseling and Planning, 14, 75–87.

Kim, J., Sorhaindo, B., & Garman, E. T. (2006). Relationship between financial stress and workplace absenteeism of credit counseling clients. Journal of Family and Economic Issues, 27(3), 458–478.

Kusairi, S., Sanusi, N. A., Muhamad, S., Shukri, M., & Zamri, N. (2019). Financial Households'efficacy, Risk Preference, And Saving Behaviour: Lessons From Lower-Income Households In Malaysia. Economics & Sociology, 12(2), 301-318.

Kwon, I., & Sohn, K. (2017). Job dissatisfaction of the self-employed in Indonesia. Small Business Economics, 49(1), 233-249.

Lajuni, N., Bujang, I., Lily, J., Yacob, Y., & Sang, L. T. (2019). Financial knowledge and modified theory of planned behaviour influence on financial behavioural intention: A multi-group analysis. The Business & Management Review, 10(3), 321-328.

Lawless, N. M., & Lucas, R. E. (2011). Predictors of regional well-being: A county level analysis. Social Indicators Research, 101(3), 341-357.

Lee, Y. J., & Sabharwal, M. (2016). Education–job match, salary, and job satisfaction across the public, non-profit, and for-profit sectors: Survey of recent college graduates. Public Management Review, 18(1), 40-64.

Loke, Y.J (2014), Debt Servicing Burden among Working Adults in Malaysia, Working paper. The Asian Conference on the Social Sciences

Lucifora, C., & Meurs, D. (2006). The public sector pay gap in France, Great Britain and Italy. Review of Income and wealth, 52(1), 43-59.

Luechinger, S., Meier, S., & Stutzer, A. (2010). Why does unemployment hurt the employed? Evidence from the life satisfaction gap between the public and the private sector. Journal of Human Resources, 45(4), 998-1045

Lusardi, A., & Mitchell, O.S. (2006). Financial literacy and planning: implications for retirement wellbeing. Working. Paper Pension Res. Council, Univ. Pennsylvania, Philadelphia

Lusardi, A., & Mitchell, O.S. (2007). Financial literacy and retirement planning: new evidence from the Rand American Life Panel. Work. Pap. 2007-157, Univ. Michigan Retire. Res. Cent., Ann Arbor

Lyons, S. T., Duxbury, L. E., & Higgins, C. A. (2006). A comparison of the values and commitment of private sector, public sector, and parapublic sector employees. Public administration review, 66(4), 605-618

Mahdzan, N. S., Zainudin, R., Sukor, M. E. A., Zainir, F., & Ahmad, W. M. W. (2019). Determinants of subjective financial well-being across three different household income groups in Malaysia. Social Indicators Research, 146(3), 699-726.

McAdam, R., & Reid, R. (2000). A comparison of public and private sector perceptions and use of knowledge management. Journal of European Industrial Training, 24(6), 317-329.

Melly, B. (2005). Public-private sector wage differentials in Germany: Evidence from quantile regression. Empirical Economics, 30(2), 505-520

Norvilitis, J. M., Szablicki, P. B., &Wilson, S. D. (2003). Factors influencing levels of credit card debt in college students. Journal of Applied Social Psychology, 33(5), 935–947.

O’Neill, B., Sorhaindo, B., Xiao, J. J., & Garman, E. T. (2005a). Financially distressed consumers: Their financial practices, financial well-being, and health. Financial Counseling and Planning, 16(1), 73-87

O’Neill, B., Sorhaindo, B., Xiao, J. J., & Garman, E. T. (2005b). Health, financial well-being, and financial practices of financially distressed consumers. Consumer Interests Annual, 51, 80-82.

O’Neill, B., Sorhaindo, B., Xiao, J. J., & Garman, E. T. (2005c). Negative health effects of financial stress. Consumer Interests Annual, 51, 260-262

Parcel, T. L., & Menaghan, E. G. (1997). Effects of low-wage employment on family well-being. The Future of Children, 116-121.

Perry, V. G., & Morris, M. D. (2005). Who is in control? The role of self‐perception, knowledge, and income in explaining consumer financial behavior. Journal of consumer affairs, 39(2), 299-313.

Philippas, N. D., & Avdoulas, C. (2020). Financial literacy and financial well-being among generation-Z university students: Evidence from Greece. The European Journal of Finance, 26(4-5), 360-381.

Prawitz, A. D., & Cohart, J. (2016). Financial management competency, financial resources, locus of control, and financial wellness. Journal of Financial Counseling and Planning, 27(2), 142-157.

Prawitz, A., Garman, E. T., Sorhaindo, B., O'Neill, B., Kim, J., & Drentea, P. (2006). InCharge financial distress/financial well-being scale: Development, administration, and score interpretation. Journal of Financial Counseling and Planning, 17(1), 34-50.

President’s Advisory Council on Financial Literacy (PACFL) (2008). 2008 Annual Report to the President. Retrieved from https://www.treasury.gov/about/organizational-structure/offices/Domestic-Finance/Documents/PACFL_Draft-AR-0109.pdf

Rainey, H. G., Backoff, R. W., & Levine, C. H. (1976). Comparing public and private organizations. Public administration review, 36(2), 233-244.

Remund, D. L. (2010). Financial literacy explicated: The case for a clearer definition in an increasingly complex economy. Journal of consumer affairs, 44(2), 276-295.

Rotter, J. (1966). Generalize expectancies for internal versus external control of reinforcement. Psychological Monographs, 80(Whole NO. 609)

Ryan, C. (2013). Responses to Financial Stress at Life Transition Points. SSRN. https://doi.org/10.2139/ssrn.2230176

Sabri, M. F., MacDonald, M., Hira, T. K., & Masud, J. (2010). Childhood consumer experience and the financial literacy of college students in Malaysia. Family and Consumer Sciences Research Journal, 38(4), 455-467.

Salignac, F., Hamilton, M., Noone, J., Marjolin, A., & Muir, K. (2020). Conceptualizing financial wellbeing: an ecological life-course approach. Journal of Happiness Studies, 21(5), 1581-1602.

Sardžoska, E. G., & Tang, T. L. P. (2015). Monetary intelligence: Money attitudes—unethical intentions, intrinsic and extrinsic job satisfaction, and coping strategies across public and private sectors in Macedonia. Journal of Business Ethics, 130(1), 93-115.

Sevä, I. J., Vinberg, S., Nordenmark, M., & Strandh, M. (2016). Subjective well-being among the self-employed in Europe: macroeconomy, gender and immigrant status. Small Business Economics, 46(2), 239-253.

Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30(6), 708–723.

Simona-Moussa, J., & Ravazzini, L. (2019). From one recession to another: longitudinal impacts on the quality of life of vulnerable groups. Social Indicators Research, 142(3), 1129-1152.

Sławińska, K. (2021). Public–private sector wage gap in a group of European countries: an empirical perspective. Empirical Economics, 60(4), 1747-1775.

Stango, V. and Zinman J. (2009). Exponential growth bias and household finance. Journal of Finance, 64, 2807–49

Strathman, A., Gleicher, F., Boninger, D. S., & Edwards, C. S. (1994). The consideration of future consequences: Weighing immediate and distant outcomes of behavior. Journal of Personality and Social Psychology, 66, 742–752. http://dx.doi.org/10.1037/0022-3514.66.4.742

Su, R., Tay, L., & Diener, E. (2014). The Development and Validation of the Comprehensive Inventory of Thriving (CIT) and the Brief Inventory of Thriving (BIT). Applied Psychology: Health and Well-Being, 6(3), 251–279.

Tay, L., & Diener, E. (2011). Needs and subjective well-being around the world. Journal of personality and social psychology, 101(2), 354-365.

Top, M., Akdere, M., & Tarcan, M. (2015). Examining transformational leadership, job satisfaction, organizational commitment and organizational trust in Turkish hospitals: public servants versus private sector employees. The International Journal of Human Resource Management, 26(9), 1259-1282.

Utkarsh, Pandey, A., Ashta, A., Spiegelman, E., & Sutan, A. (2020). Catch them young: Impact of financial socialization, financial literacy and attitude towards money on financial well‐being of young adults. International Journal of Consumer Studies, 44(6), 531-541.

Van Rooij, M., Lusardi, A., Alessie, R. (2012). Financial literacy, retirement planning, and wealth accumulation. Economic Journal. 122, 449–78

Voydanoff, P. (1990). Economic distress and family relations: A review of the eighties. Journal of Marriage and the Family, 52(4), 1099–1115. https ://doi.org/10.2307/35184 1.

Xiao, J. J. (2008). Applying behavior theories to financial behavior. In Handbook of consumer finance research (pp. 69-81). Springer, New York, NY.

Xiao, J. J., Sorhaindo, B., & Garman, E. T. (2006). Financial behaviours of consumers in credit counselling. International Journal of Consumer Studies, 30(2), 108-121.

Xiao, J. J., Tang, C., & Shim, S. (2009). Acting for happiness: Financial behavior and life satisfaction of college students. Social indicators research, 92(1), 53-68.

Xue, R., Gepp, A., O’Neill, T. J., Stern, S., & Vanstone, B. J. (2021). Financial literacy and financial strategies: The mediating role of financial concerns. Australian Journal of Management, 46(3), 437-465.

Zeffane, R. (1994). Patterns of organizational commitment and perceived management style: A comparison of public and private sector employees. Human relations, 47(8), 977-1010.

Zeffane, R., & Melhem, S. J. B. (2017). Trust, job satisfaction, perceived organizational performance and turnover intention: A public-private sector comparison in the United Arab Emirates. Employee Relations, 39(7), 1148-1166.


  • There are currently no refbacks.

Copyright (c) 2023 Gadjah Mada International Journal of Business

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.