October 15, 2020

Older and Self-Employed – a Diverse Lot

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. …Learn More