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Understanding the decline in self-employment among individuals nearing retirement

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  • Bradley Heim

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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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    File URL: http://hdl.handle.net/10.1007/s11187-015-9660-2
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. NAGORE GARCIA Amparo & ROSSI Cristina & VAN SOEST Arthur, 2018. "Labour Market Decisions of the Self-Employed in the Netherlands at the Statutory Retirement Age," LISER Working Paper Series 2018-13, LISER.
    2. Tommaso Minola & Giuseppe Criaco & Martin Obschonka, 2016. "Age, culture, and self-employment motivation," Small Business Economics, Springer, vol. 46(2), pages 187-213, February.
    3. Shanthi Ramnath & John B. Shoven & Sita Nataraj Slavov, 2017. "Pathways to Retirement through Self-Employment," NBER Working Papers 23551, National Bureau of Economic Research, Inc.
    4. 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.

    More about this item

    Keywords

    Self-employment; Retirement; Health insurance; Taxes; Markov chain; L26; J68; I13;

    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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