Working Paper: NBER ID: w0584
Authors: Victor R. Fuchs
Abstract: This longitudinal analysis of the labor market behavior of older, urban white males in 1969, 1971, and 1973 focuses on changes from wage-and-salary to self-employment and changes from working to non-working status. In each two-year transition approximately four percent of wage-and-salary workers switched to self-employment. They were primarily men who were previously self-employed or who were in wage-and-salary occupations with characteristics similar to self-employment, e.g., managers and salesmen. For a blue collar worker employed forty hours per week the predicted probability of switching was close to zero. Controlling for a large number of economic and demographic variables, the self-employed were significantly more likely to continue to work, partly by reducing their workweek to under 35 hours. Other significant predictors of continuing to work are good health, years of schooling, white collar occupation, no expectation of a private pension, and a workweek longer than fifty hours. Age is also important, especially at the eligibility ages set by social security.
Keywords: self-employment; labor force participation; older males; retirement; health status
JEL Codes: J14; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Health Status (I12) | Labor Force Participation (J49) |
| Self-Employment (L26) | Continuing to Work (J29) |
| Age (J14) | Continuing to Work (J29) |
| Occupational Class (J29) | Switching to Self-Employment (L26) |
| Previous Self-Employment Experience (N81) | Switching to Self-Employment (L26) |
| Job Characteristics (J29) | Switching to Self-Employment (L26) |
| Pension Expectations (H55) | Switching to Self-Employment (L26) |
| Health Status (I12) | Labor Force Withdrawal (J63) |
| Social Security Eligibility (H55) | Labor Force Withdrawal (J63) |