Scandinavian Working Papers in Economics
Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies
No 325: Who says life is over after 55? Entrepreneurship and an aging population
Mikaela Backman () and Charlie Karlsson ()
Additional contact information
Mikaela Backman: Centre for Entrepreneurship and Spatial Economics, Jönköping International Business School, Postal: Jönköping International Business School, , P. O. Box 1026, , SE-551 11 Jönköping, , Sweden
Charlie Karlsson: Centre of Excellence for Science and Innovation Studies (CESIS ), Jönköping International Business School, Postal: Jönköping International Business School, , P. O. Box 1026, , SE-551 11 Jönköping, , Sweden
Abstract: Several studies confirm a positive inverted U-shaped relationship between age and entrepreneurship. This paper analyses if this statement is true also for Sweden. By focusing on those above the age of 50, this paper adds knowledge about how individuals close to their retirement act in terms of self-employment and to what extent they contribute as entrepreneurs to the overall society. First, it analyses at the regional level the propensity of older people to start firms with a focus on the relationship between different age cohorts and the rate of new firm formation. At the second stage, an individual perspective is taken where the probability to become self-employed is expected to increase as individuals be¬come older but at a decreasing rate. By decomposing the population in different age cohorts, it is possible to find differences in the probability of becoming self-employed. To increase and deepen the knowledge about the relationship between age and entrepreneurship this paper further adds to existing literature by separating regions into different categories along the urban-rural hierarchy. The results in this paper confirm that the rate of entrepreneurship first increases and then decreases with age. Individuals above both 55 and 64 have a positive influence on the rate of entrepreneurship at both the regional as well as the individual level. The impact is stronger in locations that are more rural.
Keywords: Ageing; new firm formation; self-employment; age cohorts; micro data; urban-rural hierarchy
31 pages, September 30, 2013
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