Self-Employment in the Golden Years

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.

INTRODUCTION

The median age of the total population is increasing. Accordingly, once the oldest babyboomers
reach age 65 in 2011, the population will begin to age rapidly. The U.S. 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 prime working-age adults, between the ages of 25 and
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 retired yet receive income from self-employment. The following section provides a
background on the aging population that is retired or nearing retirement, and special problems
associated with starting and conducting business in rural areas. Data from the March Supplement
to the 2004 Current Population Survey are then analyzed by sex and location.

Sherry Robinson, Penn State University
[email protected]

Walter Janoski, Penn State University
[email protected]

Full Story: http://www.sbaer.uca.edu/research/allied/2005vegas/entrepreneurship/8.pdf