Blog Harvey A. Friedman Center for Aging

Entrepreneurship in later life

Written by Cal J. Halvorsen, MSW, doctoral student and the William E. Gordon Research Fellow at the Brown School

I recently conducted an on-the-spot focus group among my geographically dispersed, early-30s friends in our online group chat. I asked them to describe an entrepreneur, giving me their initial, gut reactions.

Responses centered on the image of a young, technologically savvy entrepreneur, with several using the word, “startup.” They threw in terms like “disrupt” and “innovate” to poke fun at the field, which they sensed is enamored by these ideals. While many entrepreneurs undoubtedly fit this illustration, most do not. In the United States, for example, research by the Kauffman Foundation has revealed that it is older adults who are the most likely to start new businesses.

Looking at Americans younger than 65 years, those aged 55 to 64 years started about one-quarter of all new businesses in 2016.

There is a great amount of debate regarding the definition of entrepreneurship. Some notable scholars, such as Gregory Dees and Peter Drucker, have described entrepreneurs as being innovative in their work. This would disqualify owners of local “mom and pop” restaurants from joining this lofty group, for example. While I understand and appreciate this ideal, as an applied researcher who aims to be objective in his work, I inherently disagree with it. It is nearly impossible to define “innovative” and to group individuals as entrepreneurs or not based on the subjective opinions of researchers.

As such, when conducting applied research, I have chosen to define entrepreneurs as those who are self-employed, mirroring what many established researchers in entrepreneurship already do. And when conducting primary data collection, I plan to ask self-employed older adults if and why they identify as entrepreneurs, small business owners, self-employed, or something else.

Rates of self-employment are high among older Americans and are expected to increase. Looking at all Americans—including those in and out of the workforce—the percentage of those aged 62 and older who were self-employed increased from 4.2% in 1988 to 5.4% in 2015. This may seem like a small shift, but that gain, combined with the large increase in the number of older adults in that time, has resulted in many more self-employed older adults.

Looking at this another way—considering only those in the workforce—the data show higher rates of self-employment among older adults. While only about one in 13 (7.2%) of Americans aged 16 to 49 were self-employed in 2014, about one in six (15.8%) adults aged 60 to 64, just more than one in five (21.2%) adults aged 65 to 69, more than one in four (28.5%) adults aged 70 to 74, and just less than one in three (30.2%) of adults aged 75 to 79 were self-employed. And this trend isn’t expected to end anytime soon, with approximately one in four Americans ages 44 to 70 – about 25 million people – interested in starting new businesses or nonprofit ventures within five to 10 years.

This is a topic of study ready for increased scholarship, and free and publicly-available datasets, such as the Health and Retirement Study and the Current Population Study, should be employed. In an article I published with Nancy Morrow-Howell, A Conceptual Framework on Self-Employment in Later Life: Toward a Research Agenda, we review the current empirical and conceptual literature and present a new conceptual framework on self-employment in later life.

While there is a growing body of knowledge about general productive engagement in later life—work and volunteering, for example—there is little known about the antecedents, experiences, and outcomes of self-employment in later life, even though this continues to be a major form of work in later life.

Further, there is a lack of scholarship on how contextual factors, such as community, societal, and economic characteristics of the time affect an older adult’s decision to pursue self-employment and its outcomes. Finally, we currently know very little about the relative effects of age—including chronological age and perceived future time—on entrepreneurship in later life. Our framework encourages research on all of these areas of enquiry.

Areas of interest I intend to pursue in my research include the psychological factors that are related to self-employment in later life, including perceived future time, generativity, and personality.

I also plan to assess how levels of human (e.g., education and health), social (e.g., marriage and social connections), and financial (e.g., income and wealth) capital influence one’s interest in entrepreneurship and ultimate transition into that work. Through this research, I hope to identify structural barriers to successful entrepreneurship in later life (noting that “successful” may mean different things to different individuals) and programs and policies that can close or decrease these opportunity gaps.

I recently received the Dissertation Fellowship in Retirement Research, funded by the U.S. Social Security Administration and administered by the Center for Retirement Research at Boston College. I plan to assess the characteristics of self-employed Americans in later life — as well as their financial well-being and personal health outcomes — in comparison to those in wage-and-salary work for my dissertation. I hope my work will ultimately support programs and policies that encourage entrepreneurs to Age Out Loud, as is the theme for this year’s Older Americans Month, and contribute to a society that celebrates the past, present, and future successes of entrepreneurs at any age.

With the resources below, you can:

  • Learn about becoming an older entrepreneur through the U.S. Small Business Administration’s Encore Entrepreneur program.
  • Read recent research on entrepreneurship in later life in the Public Policy & Aging Report, including from the notable “senior entrepreneurship” advocate, Elizabeth Isele.
  • Celebrate the achievements of older social entrepreneurs and innovators through the AARP Purpose Prize Award.
  • Engage with like-minded individuals – entrepreneurs, innovators, and friends of all ages – every Thursday at the Venture Café St. Louis.