Vice President Gene Kovacs Discusses Self-Employment and the Aging Workforce

March 12, 2014

Analysis Group Vice President Gene Kovacs and research economists Kevin Cahill and Michael Giandrea recently addressed self-employment and its viability as an option for aging workers in their coauthored blog post "Self-Employment: The Answer for an Aging Workforce and a Sluggish Economy?" (March 5, 2014). The article was posted on Boston College's Aging & Work blog and also syndicated by The Huffington Post. With diminished prospects for wage-and-salary work in recent years and projections of sluggish growth for at least the near team, self-employment seems like one potentially fruitful option for older Americans looking to cope with the current macroeconomic climate, according to the authors.

In their opinion piece, Dr. Kovacs, Dr. Cahill, and Dr. Giandrea note that while prior research suggests that self-employment is already an attractive option for a large segment of the older population, the question still remains as to whether older Americans who are not self-employed should be encouraged to try it. Despite some of the positives of being self-employed, such as greater scheduling flexibility and working fewer hours, the authors explain that there are a number of other factors to consider, including the financial security of older Americans: "The typical older worker has less than $25,000 in nonhousing, nondefined-benefit pension wealth. Does it make sense for these workers to bet what little they've saved?" According to the authors, self-employment may be an attractive option for some older workers, and the jobs, goods, and services these people create will help the economy: "For most people, however, the benefits of risking their security don't outweigh the potential losses, especially given that time is short for many older workers to acquire the assets they'll need for their retirement, let alone to recover from a failed business venture."

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