DETERMINANTS OF SAVING BEHAVIOR OF THE SALARIED EMPLOYEES IN ETHIOPIA: A CASE STUDY OF WOLAITA SODO TOWN.

Saving is considered as an important variable in the theory of economic growth determining both national and individual wellbeing. However, saving level in Ethiopia is very low and little is known empirically about its determinants. This study was conducted with the objectives of assessing the saving habits and identifying the demographic variables that significantly influence saving decision of salaried employees in Wolaita Sodo town, Ethiopia. In order to meet these objectives, primary data were obtained by distributing self-administered questionnaires to a sample of 209 respondents. The data were distributed to the respondents using covenant sampling technique. Logistic regression model was used to analyze the effect of explanatory variables, like gender, age, educational level, field study, marital status, working experiences and income level on the dependent variable which is saving decision. A total of seven explanatory variables were included in the regression. The results obtained from the analyses conclude that only field study and income level of the salaried employees have a significant impact on saving decision of the salaried employees. Moreover, the results of the study conclude that gender, age, field study, experience and income level have a strong relationship with saving rate of the respondents, but educational level and marital status do not have a strong relationship with saving rate of the respondents. Finally, it is recommended that the responsible bodies to create wide range of awareness in urban and rural areas through financial education and training relating to saving and finance.