Self-Employment and Labor Market Transitions at Older Ages

Center for Retirement Research at Boston College, 2000

Posted: 8 Mar 2010

See all articles by Donald Bruce

Donald Bruce

University of Tennessee, Knoxville

Douglas Holtz-Eakin

Syracuse University; National Bureau of Economic Research (NBER)

Joseph F. Quinn

Boston College - Department of Economics

Date Written: December 1, 2000

Abstract

Self-employment is an important aspect of the labor market activity of older workers and many wage and salary workers choose a period of self-employment before complete labor force withdrawal. Our analysis of the HRS data indicates that the determinants of self-employment transitions among these workers reflect those of younger workers. In particular, there appears to be an important effect of credit market imperfections, but little impact of employer-provided health insurance.

In light of the demographic shift toward a relatively elderly population, these results suggest that the degree to which older workers utilize self-employment as a bridge to complete retirement will be more influenced by the distribution of wealth than by the private sector promise of medical insurance. Viewed from a research perspective, these results suggest the need for explicit modeling of joint life-cycle evolution of asset accumulation and the choice of working in the salaried and self-employed sectors. In addition, our results emphasize the importance of viewing "retirement" as a process. In addition to transitions from wage and salary work to self-employment (and vice versa), there are interesting patterns of re-entry to the labor force, and to self-employment in particular, that merit further attention.

Suggested Citation

Bruce, Donald James and Holtz-Eakin, Douglas and Quinn, Joseph F., Self-Employment and Labor Market Transitions at Older Ages (December 1, 2000). Center for Retirement Research at Boston College, 2000, Available at SSRN: https://ssrn.com/abstract=1127413

Donald James Bruce (Contact Author)

University of Tennessee, Knoxville ( email )

Center for Business and Economic Research (CBER)
1000 Volunteer Blvd., Stokely Management Center 72
Knoxville, TN 37996-4334
United States
(865) 974-5441 (Phone)
(865) 974-3100 (Fax)

HOME PAGE: http://web.utk.edu/~dbruce

Douglas Holtz-Eakin

Syracuse University ( email )

900 S. Crouse Avenue
Syracuse, NY 13244-2130
United States
315-443-3612 (Phone)
315-443-3717 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Joseph F. Quinn

Boston College - Department of Economics ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
501
PlumX Metrics