We thank Kevn Cahll for great research assstance, Esther Grey for her assist n preparng the manuscrpt, and the center for Polcy Analysis at Syracuse Unversty and the middle for Retrement Research at Boston Faculty for assist. The opnons and conclusons are solely these of the authors and should not be construed as representng the opnons or polcy of NIA, SSA or any agency of the Federal Authorities. 2 1. INTRODUCTION In ten years, the leadng edge of the child boomer cohorts wll attain age 62, and the Unted States wll begn a basic shft n the age dstrbuton of ts populaton and ts workforce. The number of Amercans aged sixty two and over, practically all elgble to clam Socal Securty outdated-age benefts, wll double from about 40 mllon as we speak to 80 mllon n the yr 2030, whle the proporton of the populaton n ths age group ncreases by half, from 15 to 23 % (U.S. Desk 2.) Despte consciousness of those dramatc demographc adjustments, researchers and polcy makers are removed from understandng ther full mplcatons.
One mplcaton that has been properly publczed s the mpact of the populaton shft on Socal Securty fnances. 3, 179). One possble response to ths long run fundng downside s a reducton or delay n future Socal Securty benefts. 1 In response to ths, and to the ncreasng well being and longevty of older Amercans, future generatons of workers may decde to reman n the labor pressure longer than do present staff, and to rely even more on earnngs to mantan ther economc properly-beng. 2 Knowledge already recommend an finish to the put up-war pattern of earler and earler retrement. After decades of regular declne, labor pressure partcpaton charges for older men have been stable snce the md-1980s. Self-employment s an mportant feature of lfe-cycle labor supply n the Unted States. Selfemployment amongst Amercan employees rses steadly wth age, wth the most dramatc bounce occurrng at age sixty five (see Fgure 1). Almost a quarter of all employed (nonagrcultural) men aged sixty five and older, and thirteen % of those aged fifty five to 64, are self-employed, compared to only eight % of these aged 25 to fifty four (U.S.
Desk 15). For ladies, the proporton self-employed s decrease at every age, but stll jumps from 6 p.c among these aged 25 to fifty four to 9 p.c at ages 55 to sixty four and then to 14 p.c for employed women aged 65 or older. Three These patterns appear qute stable over tme. Nonetheless, even f age-specfc self-employment charges reman stable, we'd anticipate the mportance of self-employment to rse as the variety of older Amercans ncreases. Nonetheless, there are causes to suspect that self-employment rates could rse. Consderable research has establshed that retrement s a process, not a sngle event. Many older staff utlze one or more brdge jobs between ther career employment and full labor pressure wthdrawal, often combnng earnngs and the recept of retrement benefts. The mportance of these brdge jobs, ncludng self-employment, s lkely to ncrease n the longer term. For instance, obligatory retrement was frst delayed from age sixty five to age 70, after which outlawed n the md-1980s for the vast majorty of Amercan staff. This article was created with GSA C ontent Gener ator Demoversion.
In addton, work dsncentves n Socal Securty are beng elmnated. The earnngs take a look at has been elmnated for recpents who have reached the normal retrement age, in order that they'll now earn any amount wthout losng socal Securty benefts. Four to 66, and s later scheduled to rse farther from 66 to 67. Ths s the equvalent to an across-theboard beneft decrease, whch wll change the relatve attractveness of work and retrement. 4 Ths development wll lkely contnue: reform proposals nclude acceleratng and games [www.gamingdeals.shop] extendng the ncrease n the normal retrement age past 67, and even ncreasng the age of ntal elgblty beyond 62. In comparison with the present system, staff wll be inspired to reman n the labor pressure longer than they do now. In the prvate sector, however, many defned-beneft employer penson plans contnue to penalze work beyond a partcular age (typically the earlest age of penson elgblty) by means of beneft calculaton guidelines beneath whch the value of anticipated penson benefts declnes wth addtonal years of labor on that job.
One soluton to the smultaneous fnancal ncentves to work more (from Socal Securty) yet depart early from ther current jobs (from defned-beneft employer pensons) would be for staff to leave ther career jobs when penson ncentves dctate after which contnue workng elsewhere. Past experence means that many of those workers wll turn to self-employment. Thus, t s essental to understand labor supply decsons over the latter part of the lfe cycle when and the way older Amercans depart the labor power. The purpose of ths paper s to investigate the determnants of self-employment amongst older staff. We buld upon prevous analysis on retrement patterns and on entrepreneurshp, and focus upon the roles of lqudty constrants and well being nsurance on the decson to turn into and to reman self-employed. Lqudty constrants could also be much less mportant mpedments to self-employment among older employees than among the younger due to lfe-cycle asset accumulaton, ether by way of private savngs or via nsttutonalzed penson preparations.