Work and Well-Being Among the Self-Employed at Older Ages

Published In: AARP Public Policy Institute Research Report no. 2007-04, Feb. 2007

Posted on RAND.org on December 31, 2006

by Julie Zissimopoulos, Lynn A. Karoly

Self-employment increases with age. About one-third of all self-employed workers become self-employed at or after age 50, according to this AARP Public Policy Institute Issue Paper that explores patterns of self-employment at older ages, including: --The characteristics of older self-employed workers and the nature of their jobs --Expectations about job changes and retirement, and actual retirement experiences among older self-employed workers --Transitions in and out of self-employment at older ages --The wealth accumulation and portfolio diversification of older self-employed workers --The consequences of shifts to self-employment at older ages for retirement assets. The study compares a number of groups--Age 50+ self-employed to age 50+ wage and salary workers ; Self-employed before age 50 to self-employed at or after age 50 ; Self-employed with employees to self-employed without employees--and finds considerable differences between the groups. In particular, those self-employed before age 50 and those with employees most closely resemble each other, while those who became self-employed at or after age 50 are more similar to the self-employed without employees. Self-employed workers were found to be, on average, much better prepared for retirement than are wage and salary workers-they are more likely than wage and salary workers to own all types of property and financial assets and to have much higher levels of all types of non-pension wealth.

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