Older and Self-Employed – a Diverse Lot

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Self-employed workers who are 50 and older fall into a hierarchy of sorts, a new study finds.

The largest group is the 75 percent who work independently in jobs like freelancer and gig worker. Their average earnings are low – $18,000 a year – and they are more likely to be women or Hispanics.

The other 25 percent of the self-employed older workers are primarily white men and are evenly divided between business owners and managers who work on a contract basis. These individuals tend to be doctors, lawyers, or executives in industries ranging from finance and construction to retail.

To get a better handle on who is choosing self-employment and why, University of Michigan researcher Joelle Abramowitz analyzed 2016 survey data from the Health and Retirement Study. These data included not only older workers’ employment status but also specific information about their employers, industries, and occupations.

The self-employed account for roughly one out of five older workers, but the arrangement is especially popular among boomers over 65 – a third of the workers in this age group are self-employed.

Abramowitz’s research, funded by the U.S. Social Security Administration, finds a lot of diversity in the jobs the self-employed do and in their perceptions of work.

The low-paid independent workers dominate jobs like caregiver, cleaner, farmer, artist, and beauty industry worker. Many view themselves as “retired” and say they would rather not work but apparently need to supplement their retirement income.

In contrast, the owners and managers are far less likely to see themselves as officially retired. Compared with the independent workers, they earn considerably more and are wealthier. The net value of their financial, housing and other wealth exceeds $1 million on average.

Their attitudes are different too. They are very engaged in work, putting in a full 40 hours a week, compared with just 30 hours clocked by the independent workers. And more of the owners and managers expect to work past 65 than the independent freelancers and gig workers.

Regardless of the type of work they do, all of the self-employed people in this study have a couple of important things in common. They are healthier and much more satisfied with their lives than the older people who are working directly for an employer.

This study is a start on understanding the dynamics of being self-employed late in life.

To read this study, authored by Joelle Abramowitz, see “New Insights on Self-employment of Older Adults in the United States.”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the author and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.    


There is more research to be done on this topic, and I hope the CRR folks find time to do it. Specifically, the Abramowitz study does not look at how the self employed came to be self employed. Was it a choice, or was self employment forced on them by job loss. In the latter case, their situation is presumably less advantageous than it would have been had they not lost their job.

Peter tan

In Singapore, where I stay, most of the elderly work until their 70s and are forced to retire. But it is an expensive country with a high cost of living. So it’s really difficult to retire.

Self employment is tough too here because the tax is very high. And the news shows that 50% of healthy Singaporeans will end up disabled.

So it is really difficult for self employed Singaporeans

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