Association for Public Policy Analysis & Management

Panel: Older Workers' Self-Employment Trends and Prospects

(Employment and Training Programs)

Older households have faced increasing economic pressures during the past three decades, especially through rising financial risks such as growing indebtedness, and growing labor market risks such as longer unemployment spells. These economic pressures have lowered the retirement preparedness of those households nearing retirement. Older households may consequently look at options to work longer, so as to increase their retirement preparedness. However, some of the phenomena that create economic pressures, especially longer unemployment spells, could potentially stand in the way of older households working longer in wage and salary employment. Thus, self-employment may offer a promising alternative path for older households who are facing lowered retirement preparedness. There is already some evidence that older households increasingly move into self-employment. There appears to be, for instance, a growing trend of older workers moving out of call career employment – extended periods of wage and salary employment – into self-employment. And, entrepreneurship has been more prevalent (more start-ups) among older households than among younger ones, countering a long-time trend in the other direction. This panel will address key policy-relevant questions related to older self-employment. First, do all forms of older self-employment (independent contracting, entrepreneurship and part-time self-employment) increase at similar rates? Answering this question also sheds some light on the potential risks and income and wealth benefits from older self-employment. Second, is the recently observed growth in older self-employment sustainable? Answering this question also illustrates the reasons for older workers to move into self-employment, most notably whether the increase in older self-employment is indeed a reflection of rising economic pressures in wage and salary employment. And third, does older self-employment respond to policy? This panel will especially focus on the role that health insurance and income support play for older workers increasingly seeking self-employment. Understanding the link between these policy relevant factors and self-employment could help inform future policy design.