Starting a new business later in life

Abstract

Self-employment in later life may be either a career option or a form of partial retirement. This paper adds knowledge about those individuals who start a business when they are older. A large longitudinal data set is utilized to examine the transitions of individuals aged 55–74 to self-employment in Finland. The significance of prior activity as well as personal, household, financial, and environmental characteristics is analyzed for the transitions. The results show that most of those entering self-employment in later life have prior self-employment experience, thus suggesting that entrepreneurship at later ages is often habitual. Habitual entrepreneurs deviate from novice entrepreneurs in many respects at older ages: they are less educated, more likely men, and live mostly in urban areas. An entrepreneurial spouse has a significant effect for both, but this effect is greater for novice entrepreneurs. In most cases, a large income increases the probability to start a business at older ages.