Pathways to retirement through self-employment

TitlePathways to retirement through self-employment
Publication TypeJournal Article
Year of Publication2020
AuthorsRamnath, S, Shoven, JB, Slavov, SNataraj
JournalJournal of Pension Economics and Finance
Type of ArticleJournal
KeywordsRetirement, Self-employment, Social Security

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.

Citation Keyramnath_shoven_slavov_2020