You are here
Baby Boomers: Less Likely to Choose Self-Employment before Retirement
WASHINGTON – Today, the Office of Advocacy, an independent office within the Small Business Administration, released a report entitled, Understanding Self-Employment Dynamics Among Individuals Nearing Retirement. The report, authored by Bradley T. Heim, delves into the reasons behind the declining rate of baby boomers choosing entrepreneurship near retirement. The study addresses two questions about the decline. First, what is the defining factor causing the decreasing rate of self-employed individuals nearing retirement, and second, how is the economy or public policy helping to explain the change in these factors over time?
“America’s baby boomers may not be the jumping off point for entrepreneurial growth according to this report. However, moving forward, we can inspire this population to start the business of their dreams and take the leap of faith into entrepreneurship,” said Dr. Winslow Sargeant, Chief Counsel for Advocacy.
This report shows a decline in the self-employment rate among individuals age 55 to 64 years old. It is important to understand the factors that are leading to this decline to enable policy makers to reverse the trend. If baby boomers work longer in retirement by becoming self-employed, they can increase their own standard of living as well as provide a positive stimulus to economic activity.
Some factors found in the study include:
- Self-employed individuals are leaving their businesses and choosing to find a job at a firm instead, and
- The rate of self-employment among 55-year-olds decreased while the share of 55-year-olds increased.
Background: This study explores almost 20 years of U.S. Census Bureau data from 1994-2012 to describe in greater detail the continuation, exit and entry rates with respect to self-employment.
The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed and Senate confirmed Chief Counsel for Advocacy advances the views, concerns and interests of small business before Congress, the White House, federal agencies, federal courts and policymakers. Regional advocates and an office in Washington, D.C., support the Chief Counsel’s efforts. For more information, visit www.sba.gov/advocacy, call (202) 205-6533 or get updates on Twitter (@AdvocacySBA) or Facebook at www.facebook.com/AdvocacySBA.