Academic journal article Academy of Entrepreneurship Journal

A Location-Based Analysis of Self-Employment among Older People

Academic journal article Academy of Entrepreneurship Journal

A Location-Based Analysis of Self-Employment among Older People

Article excerpt


The number of people who are over 60 is growing rapidly. Even though they choose to retire from full-time jobs, many retirees are healthy enough to work and want to remain active. At the same time, retired people often find they would like additional supplemental income without returning to full-time work. One solution is self-employment. This could be especially true in rural areas where it may be more difficult to obtain jobs that suit retirees' needs. This paper examines the proportions of men and women in metropolitan, suburban and rural areas who claim themselves as retired, yet receive income from self-employment.


The median age of the total population is increasing. Accordingly, once the oldest baby-boomers reach age 65 in 2011, the population will begin to age rapidly. The US Census Bureau predicts that between 2000 and 2040, the numbers of American 65 and older will more than double, to 77 million, while the number of adults in the prime working ages of 25 to 54 will increase by only 12 %. (Johnson, 2004, p. 48). By 2030, the proportion of people in the U.S. who are 65 and older is expected to increase from 13% to over 20% (Purcell, 2000).

As the number and proportion of older people is increasing, the traditional practice of completely retiring at age 62 or 65 is also changing. Some companies are encouraging early retirement by offering incentives that entice people to leave their career jobs, even if they would normally have continued to work. If they are active and in good health, many of these people then begin working with another employer or strike out on their own (Quinn & Kozy, 1996; Singh & DeNoble, 2003). This is especially true for retirees who find they need supplemental income. Because they live longer on average than men or do not receive sufficient benefits, women are 70% more likely to spend their retirement in poverty. In the over-50 age group, women make up 60% of the lower-income quartile (Hill, 2002, p. 40). Therefore, adequate income in retirement is more likely to be a an issue for women. This problem may be especially acute in rural areas where fewer jobs are available.

This study examines the proportions of people in rural, suburban and urban locations who are self-employed. The following section provides a background on the aging population that is retired or nearing retirement, and special problems and possible advantages associated with starting and conducting business in rural areas. Data from the March Supplement of the 2004 Current Population Survey are then analyzed by age, sex and location.


Many people continue to work or return to work after initial retirement simply because they enjoy the activity of work (Sautters, 2005) and/or need supplemental income (Kirchhoff, 2005). Since 2001, the number of employed men over age 55 has increased 20% and the number of employed women over 55 has increased 26.3% (Kirchhoff, 2005). In fact, the proportion of people over age 65 who are employed is the highest in approximately 35 years. Improved health and well-being at older ages combined with increasing prices and an overall drop in the stock market (investments) have encouraged older people to continue working. The proportion of those in the 51-56 age group who say they plan to work after age 65 has increased from 26.3% in 1992 to 39.8% in 2004 (Kirchhoff, 2005), while a survey by AARP found that 80% of the baby boom generation plans to continue working after retirement, primarily because they will need the income (Fetterman, 2005). Working past traditional retirement age is a particularly good strategy for workers who will not receive retirement benefits from an employer (Block, Waggoner & Fetterman, 2005).

One reason these numbers have risen so dramatically is that the baby boom generation is reaching retirement age. This group expects that their golden years should provide opportunities to remain active and try new things, which could include starting a business they have thought about for a long time. …

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