Pathways to retirement through self-employment

Shanthi Ramnath, John B. Shoven and Sita Slavov

Journal of Pension Economics and Finance, 2021, vol. 20, issue 2, 232-251

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.

Date: 2021
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Working Paper: Pathways to Retirement through Self-Employment (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jpenef:v:20:y:2021:i:2:p:232-251_4

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