Self-Employment Transitions among Older American Workers with Career Jobs

“National statistics show that self employment becomes more prevalent with age, partly because self employment provides older workers with opportunities not found in traditional wage-and-salary jobs, such as flexibility in hours worked and independence. This paper analyzed transitions into and out of self employment among older workers who have had career jobs. [It] utilized the Health and Retirement Study, a nationally-representative data set of older Americans, to investigate the prevalence of self employment among older workers who made a job transition later in life and to explore the factors that determine the choice of wage-and-salary employment or self employment” (p.2). (Abstractor: Author)

• The paper found “that post-career transitions into and out of self employment are common and that health status, career occupation, and financial variables are important determinants of these transitions. As older Americans and the country as a whole face financial strains in retirement income in the years ahead, self employment may be a vital part of the pro-work solution” (p.2). • “Self employment among the working population increases substantially as workers approach retirement age” (p.17). • “Older workers exhibit a great deal of flexibility in their work decisions and appear willing to take on substantial risks later in life. In a sense, the outcome is intuitive, as older workers are more likely than younger workers to have access to investment capital. Their lifetime of experience may also help them avoid many of the pitfalls associated with running a business that may ensnare younger, less experienced workers” (p.17). • “Policymakers and employers may have a lot to gain by understanding the self-employment transitions of older Americans, because the decision to remain working later in life is likely linked to the type of work people will be doing” (p.18). (Abstractor: Author)

• Last Updated:
• Created:
• Resource Publication Date: 2008
• Author(s): Giandrea, Michael D.; Cahill, Kevin E.; Quinn, Joseph F.
• Organizational Author(s): U.S. Bureau of Labor Statistics; Boston College; Analysis Group, Inc.
• Funding Source: Alfred P. Sloan Foundation
• Resource Availability: Publicly available
• Posted by: Wesley Peterson
• Posted in: Workforce System Strategies