Self-esteem derives from a person’s sense of their own worthiness. It comprises many aspects, but generally involves “…some comparison by the individual between how they would like to be and how they think they actually measure up” (Gilligan, 2008, pp40-42). According to Rutter (1990), secure and harmonious love relationships and success in accomplishing tasks identified by individuals as central to their interests are the two most significant predictors of self-esteem.

Self-esteem has been found to increase an individual’s likelihood of assimilating threatening external events without experiencing excessive negative arousal and disorganisation (Gilligan, 2008). There is evidence that for disadvantaged young people, self-esteem is a salient predictor of adjustment. Gerard and Buehler (2004) found that “…positive self-regard acts as a safeguard against psychological discomfort resulting from disparaging life circumstances” (p1845). "Further, high self-esteem might allow the individual to separate negative aspects of his or her life from any personal responsibility” (Gerard & Buehler, 2004).

Derived from Social Learning Theory (Bandura, 1982), self-efficacy is defined as “judgments of how well one can execute courses of action required to deal with prospective situations” (Armstrong, Birnie-Lefcovitch & Ungar, 2005). It is central to human agency, the capacity for self-regulation, and influences young people’s choice of activities and the environments in which they participate.

Bandura (1982) demonstrates that individuals with a more positive view of their own effectiveness exert more effort to succeed. They are also motivated to persist in the face of difficulty or failure, making them more likely to succeed under adverse conditions. Masten (2001; 2009) points to a powerful system of ‘mastery/motivation’ whereby people experience pleasure in agency, or being effective in the world.

Self-efficacy stems from a sense of mastery and control, combined with an accurate assessment of one’s personal strengths and limitations (Daniel & Wassell, 2002). Higher levels of self-efficacy are linked with an ‘internal locus of control’ and greater likelihood that young people will adopt ‘problem-focused’ rather than ‘emotion-focused’ coping strategies in adverse circumstances.

The mastery/motivation system is directly linked to increases in adaptive behaviour. It has been implicated as a critical factor in turnaround cases in resilience research (Masten, 2009). Young people extract a positive sense of power and control through experiences of caring for themselves and being able to contribute to the well-being of others (Ungar, 2006; p57). The mastery/motivation system can also be damaged, shut down or hindered by neglect and adversity, particularly where control has been removed and/or experiences of agency are undermined.

Self-efficacy can be influenced by the beliefs and actions of parents and significant others. Clear expressions of encouragement and reinforcement that demonstrate a belief in a young person’s own sense of control have a positive effect.