Flexibility in jobs and autonomy on saving: Mental accounting of personal pension saving decision in Chinese part-time employees

Abstract

The progression of the digital economy has led to a rise in the adoption of slash occupations by an expanding demographic, resulting in a more diverse wage structure. A portion of the wage is derived from full-time employment, while the remainder is part-time. This study uses a new China-specific survey dataset to investigate the impact of part-time wages (PTW) and full-time wages (FTW) on "autonomous" personal pension savings. The results are as follows: (1) The marginal impact of part-time wages on personal pension savings is significantly greater than that of full-time wages, which challenges the concept of monetary interchangeability and introduces the notion of mental accounting. (2) The mental account impact arises when part-time compensation is associated with "flexibility" in alignment with the prioritization of "autonomy" in individual pension savings. This result remains valid after statistical analysis and the elimination of alternative hypotheses. (3) There appears to be a threshold effect, as the effect of mental accounts on the relationship between part-time wages and personal pension savings progressively diminishes with increasing savings motivation but abruptly weakens as the proportion of part-time income increases. However, the mental account effect does not diminish with an increase in personal pension saving amount; rather, it amplifies. The mental account effect, according to this paper, signifies the emergence of individualistic consciousness, affords the opportunity for personal pension schemes, and is a crucial transitional step from "procedural" to "substantive" reason.