Baby boomers, who were born between 1946 and 1964, are entering their retirement years. Since rates of self-employment rise with age, a disproportionate share of the self-employed is composed of middle aged or older workers. Some of these workers have been self-employed for much or all of their working lives while others have transitioned to self-employment later in their careers, often as a way of moving into retirement. Future predictions of baby boomers as a key catalyst for small business growth in the next decade and beyond have tended to neglect an important trend. The self-employment rate among those nearing retirement (defined as individuals aged 55-64) has dropped substantially in the past 20 years. This book addresses questions about this decline, and discusses the self-employment transitions among the older American workers with career jobs.
Many developed countries are facing a demographic change with an increasing share of older individuals, yet little is known about how older workers will impact regional and national economies in terms of labor market dynamics. This Handbook deals with the important and emerging field of entrepreneurship among this group and focuses on the behavioral perspectives of this phenomenon; on innovation, dynamics and performance; and the ways entrepreneurship among the elderly looks within different countries.
This paper investigates whether individuals at the end of working life choose self-employment out of necessity and to what degree job search requirements for unemployment benefits induce people to become self-employed. For this purpose we analyze labor market transitions for people between the ages of 50 and 63 using a dynamic multinomial logit model with unobserved heterogeneity. The results indicate that at the end of the career individuals with a weak labor market position have a relatively high probability to become self-employed, e.g. to end or avoid a period of unemployment or inactivity (necessity driven self-employment). Contrasting some earlier work, the results do not suggest that self-employment is used as a gradual retirement route for employees. A difference-in-differences analysis shows that job search requirements among unemployed older workers increased the outflow from unemployment and decreased the inflow into unemployment, but did not increase self-employment out of necessity or opportunity.
This book presents results of a cross-national research project on self-employment in eleven advanced economies and demonstrates how and why the practice is reemerging in modern societies. While traditional forms of self-employment, such as skilled crafts work and shop keeping, are in decline, they are being replaced by self-employment in both professional and unskilled occupations. Differences in self-employment across societies depend on the extent to which labor markets are regulated and the degree to which intergenerational family relationships are a primary factor structuring social organization. For each of the eleven countries analyzed, the book highlights the extent to which social background, educational attainment, work history, family status, and gender affect the likelihood that an individual will enter--and continue--a particular type of self-employment. While involvement with self-employment is becoming more common, it is occurring for individuals in activities that are more diverse, unstable and transitory than in years past.
This paper employs a dynamic multinomial choice framework to provide new evidence on the effect of health on labour market transitions among older individuals. We consider retirement as a multi-state process and examine the effects of ill-health and health shocks on mobility between full-time employment, part-time employment, self-employment and inactivity. In order to disentangle the roles of unobserved individual heterogeneity and true state dependence, we estimate dynamic panel multinomial logit models with random effects, assuming a first order Markov process and accounting for the initial conditions problem. We also account for potential measurement error in the self-assessed health status by building a latent health stock model and employing measures of health shocks. Using data from the first nine waves of the (2001-2009) Household, Income and Labour Dynamics in Australia (HILDA) Survey, we find that both ill-health and health shocks greatly increase the probability of leaving full-time employment towards inactivity. We also find evidence of health-driven part-time and self-employment paths into inactivity.
Since the 1970s the long term decline in self-employment has slowed – and even reversed in some countries – and the prospect of ‘being your own boss’ is increasingly topical in the discourse of both the general public and within academia. Traditionally, self-employment has been associated with independent entrepreneurship, but increasingly it has become a form of precarious work. This book utilises evidence-based information to address both the current and future challenges of this trend as the nature of self-employment changes, as well as to demonstrate where, when and why self-employment has emerged as precarious work in Europe.
Self-employment is an increasingly popular form of employment among older workers. The three papers in this dissertation expand our knowledge base of the self-employment experience at older ages. The first paper documents the largest public and private small business assistance programs in the United States and reviews the evaluation studies conducted on those programs. The second paper finds that workers with a lump-sum distribution option in their pension plans are 27 percent more likely to transition from wage and salary work to self-employment over a two-year period than those without such an option. The third paper compares the employment trajectories of those who are likely using self-employment as a retirement transition with those who are not and identifies the factors that contribute to older workers' survival in self-employment. The analysis indicates that around one-third of self-employed older workers survive six or more years in self-employment and that most of them do not expect to work for longer than six years when they enter self-employment.
Workforce ageing has stimulated research interest in entrepreneurship in later life. For older workers, self-employment is an important alternative to waged employment. The literature addressing entrepreneurial motivation has mainly examined young cohorts, and less is known about how age-related factors intersect with entrepreneurship. Entrepreneurial motivation in later life is multifaceted, involving a social transaction whereby entrepreneurial interest is developed in a context-dependent social process. Accordingly, the social context in which people work and live influences their interest in entrepreneurship. For instance, older people as entrepreneurs are often viewed as socially unacceptable, which can dissuade their move towards self-employment. The present research draws on social learning theory and social cognitive career theory (SCCT) to explore self-employment in later life and develop and test a mediated model of self-employment interest over three studies. Study 1 explored factors influencing late-career decisions and how self-employment is perceived among the other late-career options, such as retirement. Results of interviews with 31 professional association members (aged 40 years and above) identified several age-related factors that influence older worker's self-efficacy and outcome expectations in the work domain. A model of late-career interest was developed incorporating the study results. The prominence of self-employment in the narratives supported the proposition that self-employment is an important career option in later life. Study 2 tested a model of self-employment interest focusing on the effects of future time perspective and social support on entrepreneurial self-efficacy - pre-venture, outcome expectations and self-employment interest. Findings from a sample of 174 members (aged 40 years and above) of a professional association revealed that an open-ended time perspective positively influenced entrepreneurial self-efficacy - pre-venture, and Support positively influenced outcome expectations. Consistent with SCCT, entrepreneurial self-efficacy - pre-venture mediated the relationship between future time perspective and self-employment interest, and outcome expectations mediated the relationship between Support and self-employment interest. Study 3 examined the influence of age norms. Findings from a sample of 598 financial services employees (aged 45 and above) supported prior hypotheses, replicating Study 2. Additionally, favourable age norms were positively related to entrepreneurial self-efficacy - pre-venture and outcome expectations. Consistent with SCCT, entrepreneurial self-efficacy - pre-venture and outcome expectations mediated the relationship between age norms and self-employment interest. Examination of the two-way interaction effect between age norms and future time perspective on entrepreneurial self-efficacy found that when age norms are favourable and time perspective is open ended, entrepreneurial self-efficacy - pre-venture was at its highest. The two-way interaction effect between age norms and Support on entrepreneurial self-efficacy - pre-venture suggested that when age norms were highly favourable, support was not related to entrepreneurial self-efficacy - pre-venture. However, when age norms are not favourable, Support was positively related to entrepreneurial self-efficacy - pre-venture, suggesting that age norms and Support complement each other in the development of interest in self-employment. This research extends current career and entrepreneurship theory in several ways. First, the inclusion of age-related psychosocial and sociocultural factors in the model shed light on the intersection between older age, the contextual environment and development of self-employment interest. Second, the findings support earlier arguments that older entrepreneurship is a social process whereby the social context in which people work and live influences their interest in entrepreneurship, and that entrepreneurial behaviour among older people needs to be sanctioned and supported to occur. Finally, the findings suggest the utility of SCCT in informing the development of self-employment interest in the late career stage. Practical implications, limitations and suggestions for future research directions are also discussed.
The population of Asia is growing both larger and older. Demographically the most important continent on the world, Asia's population, currently estimated to be 4.2 billion, is expected to increase to about 5.9 billion by 2050. Rapid declines in fertility, together with rising life expectancy, are altering the age structure of the population so that in 2050, for the first time in history, there will be roughly as many people in Asia over the age of 65 as under the age of 15. It is against this backdrop that the Division of Behavioral and Social Research at the U.S. National Institute on Aging (NIA) asked the National Research Council (NRC), through the Committee on Population, to undertake a project on advancing behavioral and social research on aging in Asia. Aging in Asia: Findings from New and Emerging Data Initiatives is a peer-reviewed collection of papers from China, India, Indonesia, Japan, and Thailand that were presented at two conferences organized in conjunction with the Chinese Academy of Sciences, Indian National Science Academy, Indonesian Academy of Sciences, and Science Council of Japan; the first conference was hosted by the Chinese Academy of Social Sciences in Beijing, and the second conference was hosted by the Indian National Science Academy in New Delhi. The papers in the volume highlight the contributions from new and emerging data initiatives in the region and cover subject areas such as economic growth, labor markets, and consumption; family roles and responsibilities; and labor markets and consumption.
