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.
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.
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.
Workforce is aging in most developed countries, but still needed in productive work. Entrepreneurship at older ages is an option for many aging individuals. As existing and future generations are healthier and more able to work than previous generations, working careers can, and also have been extended. Various reasons such as age, health, gender and education, family status, accumulated savings and organizational factors can affect the choice between full-time work, bridge employment and retirement. But bridge employment as well as career choices may also be affected by many environmental factors. Regions with strong traditions of entrepreneurship may be more favourable to bridge employment in the form of self-employment than other regions. On the other hand, demand conditions may also account for possibilities to bridge employment. Regions with a low level of demand may not be favourable to self-employment at older ages. While some studies have focused on transitions into self-employment among older workers, the question of the motives and background still need clarification. This paper analyzes those who start a business at older ages in different regions in Finland. Who are they, and what is their background? What is the effect of human and financial capital on self-employment decisions? What is the role of previous experience in entrepreneurship - are those without experience from entrepreneurship different from those who have it? Is self-employment at older ages a real alternative only for serial and habitual entrepreneurs? In the analysis, we utilize a large longitudinal micro data to examine transfers of workers and those out of employment aged 55-74 into self-employment in Finland in 1998-2004. The data set represents a 7 percent sample of all Finns in 2001 of whom we have a lot of register-based and other data even from the year 1970 onward. Note: An alternative choice was : theme N: enterpreuneurship, networks and innovation
The study of elderly entrepreneurship and its potential impact on labor, Social Security funds and regional economic growth is of significant importance, particularly for the US economy where population aging coincidentally intersects with the economic shift to a “knowledge economy”. On the one hand, aging, combined with a declining average retirement age, is expected to result in labor force shortages and Social Security fund exhaustion; yet on the other hand, the “knowledge economy” could elevate the value of elderly human capital as the “knowledge economy” is less physically demanding and more human-capital- and knowledge-based.Building on the utility maximization theory, economic growth theories and social theories of aging, this timely book addresses the old-age effect on entrepreneurial propensity; the sources of seniors' entrepreneurship, including the social and policy variables affecting seniors' entrepreneurship; and the economic, fiscal and labor impacts of elderly entrepreneurship.
More than one in five working Americans aged 50 and older are self-employed, yet scholarship that examines the relationships between self-employment and personal health and financial well-being is limited. Using data from six biennial waves of the Health and Retirement Study, a nationally-representative panel study of Americans past 50 years of age, this quasi-experimental dissertation documents the characteristics of self-employed older adults in comparison to wage-and-salary workers, as well as compares self-employed and wage-and-salary workers in later life on a set of financial well-being and personal health outcomes. This study incorporates inverse probability of treatment weighting (also referred to as propensity score weighting) to control for selection into the "treatment" of concern, self-employment. Among older Americans, this dissertation revealed that age, being male, reporting better health, and having higher levels of risk tolerance were predictive of self-employment, among other factors. Further, it found strong evidence that self-employment leads to reduced earnings from work, with some evidence that it increases health and wealth. This dissertation builds upon previous work while contributing to discussions about the causal effects of later-life self-employment, as well as program and policy developments to support longer working lives.
This book presents a collection of nine studies which contribute to a more robust and richer understanding of entrepreneurship, self-employment and retirement in a diversity of settings, including the Netherlands, Canada, the United Kingdom, Singapore and the US, by drawing on both qualitative and quantitative data.
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.
Not all older people are unfit for work. Indeed, most people over age 55 remain physically and mentally able to work, and rather than suffer the pressures of inflation or the boredom of idleness, many would prefer to stay productive longer. Dr. Kieffer says that their extensive experience and education qualify most of them to remain self-reliant well past current retirement ages. If they are enabled to do so, it would delay and reduce the time when they are forced to be financially and, in some cases, physically dependent. He argues that unless policy leaders in both the public and private sectors act quickly and imaginatively to gain the financial and social dividends that can accrue from longer life, our country, by default, will find itself preoccupied over the next thirty years with unnecessarily high costs of supporting its longer-living and rapidly increasing older population. Dr. Kieffer explains why current retirement policies are no longer economically and politically manageable, and he suggests a cost-effective strategy whereby public and private funds could be used to enable millions of older people to remain active in jobs that serve unmet community needs. He also outlines a strategy for helping young workers build retirement income assets during their entire work lives so that the unintended burdens that have fallen on the Social Security, pension, and public assistance programs can be eased and made more manageable in the future. Lastly, he describes the roles that government agencies, businesses, educational institutions, foundations, and older people themselves can play in carrying out the jobs and retirement income strategies.
