THE EFFECT OF DIGITAL LITERACY AND FINANCIAL LITERACY ON THE INDONESIAN’S ELDERLY SUBJECTIVE WELL-BEING: THE MEDIATING ROLE OF DIGITAL FINANCIAL INCLUSION FINAL PROJECT By: Raina Dwi Satiti 19021262 Undergraduate Program School of Business and Management Institut Teknologi Bandung 2024 i ABSTRACT The Effect of Digital Literacy and Financial Literacy on The Indonesian’s Elderly Subjective Well-Being: The Mediating Role of Digital Financial Inclusion By: Raina Dwi Satiti Student ID: 19021262 Undergraduate Program of Management Financial literacy and financial inclusion are two essential things that are often to be corresponded with the terms of individual’s well-being and welfare. The pandemic era in 2020 has boosted the growth of financial technology which open an opportunity for the digital financial inclusion adaption. On one side, the implementation of the digital finance can create an opportunity for the elderly to access the authorized financial services easily. However, due to the digital gap of the technology and lack of digital literacy capability, the elderly often finds it difficult to access financial services digitally. Indonesia has 44 million of elderly population and 43.29% of them is categorized in the category of the lowest 40% expense in Indonesia. This situation happens because there are only small percentage of the Indonesian’s elderly who has pension funds and investment benefits for their old life or can be considered as financially independent. The rest of the elderly still heavily relies their financial, physical, and psychological life towards the younger generation of Indonesia. Because of these situations, then the elderly’s subjective well-being in Indonesia should also be the one that needs to be thoughtfully considered. This research then examines further about the effect of digital literacy, financial literacy, and the mediating variable of digital financial inclusion towards the elderly subjective well-being in Indonesia, specifically for the health, psychological level, and life satisfaction aspects. This research has collected data from 203 respondents of elderly people in Indonesia with the age equal or beyond 55 years old. The effect of each variable within this research is measured using the Partial Least Squares - Structural Equation Modeling (PLS-SEM) method. The results shows that digital literacy and financial literacy has a positive significant effect towards several aspects of the Indonesian’s elderly subjective well-being. Other than that, the mediating variable of digital financial inclusion also has a magnifying effect on strengthening the effect of digital and financial literacy towards some aspects of the Indonesian’s elderly subjective well-being, specifically for the psychological level and life satisfaction aspects. Keywords: Financial Literacy, Digital Financial Inclusion, Digital Literacy, Elderly Subjective Well-Being. ii ABSTRAK Pengaruh Literasi Digital dan Literasi Keuangan Terhadap Kesejahteraan Subjektif Lansia di Indonesia: Peran Efek Mediasi Inklusi Keuangan Digital Oleh: Raina Dwi Satiti Nomor Induk Mahasiswa: 19021262 Program Sarjana Manajemen Literasi finansial dan inklusi keuangan adalah dua hal penting yang seringkali dihubungkan dengan konsep kesejahteraan subjektif individu. Pandemi yang terjadi di tahun 2020 telah meningkatkan kenaikan dari pertumbuhan teknologi finansial yang juga membuka kesempatan untuk penerapan inklusi keuangan digital secara lebih luas lagi. Di satu sisi, implementasi dari konsep keuangan digital telah membuka kesempatan untuk para lansia agar dapat mengakses layanan keuangan yang terpercaya secara lebih mudah. Namun sebaliknya, para lansia juga seringkali mengalami kesulitan dalam mengakses layanan keuangan digital karena eksistensi dari kesenjangan digital dan juga kurangnya kemampuan dalam aspek literasi digital. Indonesia memiliki populasi lansia sebanyak 44 juta orang dan 43,29% di antaranya dikategorikan dalam golongan 40% terbawah dalam pengeluaran di Indonesia. Situasi ini terjadi karena hanya sebagian kecil dari lansia di Indonesia yang memiliki dana pensiun dan menggunakan keuntungan investasi untuk kehidupan tua mereka atau dapat dianggap mandiri secara finansial.