Who says life is over after 55? Entrepreneurship and an aging population

Mikaela Backman and Charlie Karlsson ()

No 325, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: Several studies confirm a positive inverted U-shaped relationship between age and entrepreneurship. This paper analyses if this statement is true also for Sweden. By focusing on those above the age of 50, this paper adds knowledge about how individuals close to their retirement act in terms of self-employment and to what extent they contribute as entrepreneurs to the overall society. First, it analyses at the regional level the propensity of older people to start firms with a focus on the relationship between different age cohorts and the rate of new firm formation. At the second stage, an individual perspective is taken where the probability to become self-employed is expected to increase as individuals be¬come older but at a decreasing rate. By decomposing the population in different age cohorts, it is possible to find differences in the probability of becoming self-employed. To increase and deepen the knowledge about the relationship between age and entrepreneurship this paper further adds to existing literature by separating regions into different categories along the urban-rural hierarchy. The results in this paper confirm that the rate of entrepreneurship first increases and then decreases with age. Individuals above both 55 and 64 have a positive influence on the rate of entrepreneurship at both the regional as well as the individual level. The impact is stronger in locations that are more rural.

Keywords: Ageing; new firm formation; self-employment; age cohorts; micro data; urban-rural hierarchy (search for similar items in EconPapers)
JEL-codes: L26 R12 R30 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2013-09-30
New Economics Papers: this item is included in nep-age, nep-dem, nep-ent and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:cesisp:0325

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