Work

Pathways to retirement through self-employment

Year: 2020

Type: article

Abstract: We examine the role of self-employment in retirement transitions using a panel of administrative tax data. We find that the hazard of self-employment increases at popular retirement ages associated with Social Security eligibility, particularly for those with greater retirement wealth. Late-career transitions to self-employment are associated with a larger drop in income than similar mid-career transitions. Data from the Health and Retirement Study suggest that hours worked also fall upon switching to self-employment. These results suggest that self-employment at older ages may serve as a ‘bridge job,’ allowing workers to gradually reduce hours and earnings along the pathway to retirement.

Source: Journal of Pensions Economics and Finance

DOI: 10.1017/s1474747220000062

Authors: Shanthi Ramnath, John B. Shoven, Sita Nataraj Slavov

Institutions: United States Department of the Treasury, National Bureau of Economic Research, Stanford University, George Mason University

Language: English

Topic: Retirement, Disability, and Employment

Subfield: Demography

Field: Social Sciences

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

Funders: Alfred P. Sloan Foundation, U.S. Department of the Treasury, George Mason University, Stanford Institute for Economic Policy Research