Pathways to Retirement through Self-Employment
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.
Shanthi Ramnath & John B. Shoven & Sita Nataraj Slavov, 2021. "Pathways to retirement through self-employment," Journal of Pension Economics and Finance, vol 20(2), pages 232-251. citation courtesy of