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Understanding the decline in self-employment among individuals nearing retirement

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  • Bradley Heim

Abstract

This paper examines the sources of the decline in self-employment among near-retirees over 1994–2012. Using Current Population Survey data, tabulations imply that the decline was driven by an increase in the exit rate to wage and salary employment, a decline in the rate of self-employment among new entrants into this age cohort, and an increase in the share of these new entrants. Multinomial logits suggest that health insurance coverage and after-tax prices of health insurance were significantly associated with these three rates. However, counterfactual simulations suggest that only the changes in after-tax prices of health insurance were found to appreciably influence the trends in these rates, though in the opposite direction of the actual declining trend for the rate of self-employment of new entrants. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Bradley Heim, 2015. "Understanding the decline in self-employment among individuals nearing retirement," Small Business Economics, Springer, vol. 45(3), pages 561-580, October.
    • Handle: RePEc:kap:sbusec:v:45:y:2015:i:3:p:561-580
    DOI: 10.1007/s11187-015-9660-2
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    Cited by:

    1. Tommaso Minola & Giuseppe Criaco & Martin Obschonka, 2016. "Age, culture, and self-employment motivation," Small Business Economics, Springer, vol. 46(2), pages 187-213, February.
    2. Kent Adsbøll Wickstrøm & Kim Klyver & Maryam Cheraghi-Madsen, 2022. "Age effect on entry to entrepreneurship: embedded in life expectancy," Small Business Economics, Springer, vol. 58(1), pages 57-76, January.
    3. Ramnath, Shanthi & Shoven, John B. & Slavov, Sita Nataraj, 2021. "Pathways to retirement through self-employment," Journal of Pension Economics and Finance, Cambridge University Press, vol. 20(2), pages 232-251, April.
    4. Amparo Nagore García & Mariacristina Rossi & Arthur Soest, 2021. "Retirement of the self-employed in the Netherlands," Small Business Economics, Springer, vol. 56(1), pages 385-402, January.
    5. Amparo Nagore Garcia & Mariacristina Rossi & Arthur van Soest, 2018. "Labour Market Decisions of the Self-Employed in the Netherlands at the Statutory Retirement Age," Working papers 057, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    6. Steven A. Brieger & Anne Bäro & Giuseppe Criaco & Siri A. Terjesen, 2021. "Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study," Small Business Economics, Springer, vol. 57(1), pages 425-453, June.
    7. Iyad Snunu & Nicoleta Sirghi, 2020. "Does Ethnic Affiliation Affect The Choice To Be Self-Employed? Case Study On The Labor Market In Israel," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 5(special), pages 104-114, June.
    8. David B. Audretsch & Apexa Mamtora & Hugo Menendez, 2018. "Creating an entrepreneurial society in Europe," The Journal of Technology Transfer, Springer, vol. 43(6), pages 1437-1448, December.

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    More about this item

    Keywords

    Self-employment; Retirement; Health insurance; Taxes; Markov chain; L26; J68; I13;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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