The retirement behaviour of the self-employed in Britain

Simon C. Parker, Jonathan C. Rougier

Research output: Contribution to journalArticle

42 Citations (Scopus)

Abstract

We analyze the retirement behaviour of older self-employed workers, using a life cycle framework and a multinomial logit model of dynamic employment and retirement choices. Using data from the two-wave Retirement Survey, we find that greater actual or potential earnings decrease the probability of retirement among the self-employed. In contrast to employees, none of gender, health or family circumstances appear to affect self-employed retirement decisions. The dynamic analysis reveals that relatively few employees and virtually no retirees switch into self-employment in later life. The switches that do occur are motivated less by attempts to use self-employment as a bridge job or ‘stepping stone’ to full retirement, than by self-employment being a last resort for less affluent workers with job histories of weak attachment to the labour market. We compare self-employed and employee retirement behaviour and discuss the policy implications of our results.
Original languageEnglish
Pages (from-to)697-713
Number of pages17
JournalApplied Economics
Volume39
Issue number6
DOIs
Publication statusPublished - 2007

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