New research from Trinity Business School highlights that self-employment can serve as a pathway to retirement—though only for those in high-paying careers and good health. For many in low-paying, unstable jobs, however, direct retirement is the preferred choice.
Drawing on data from 123,000 people over 50 in 21 European countries, including Ireland, France, the UK, and Sweden, the study explored how self-employment might act as a “bridge” to retirement. As populations age and policymakers face pressure to sustain pensions and employment levels for older workers, self-employment has been touted as one way to keep people working longer.
Divided society
The findings show clear divides:
- Better prospects: Older workers who shifted from traditional employment to self-employment were generally in good health and had solid career prospects.
- Precarious jobs: Those in lower-paid, unstable positions rarely pursued self-employment.
- Positive conditions: Transitions to self-employment were associated mainly with favorable circumstances, like good job options or health.
“Our study shows that many who became self-employed after traditional employment likely had the choice to stay in wage-paying roles,” the authors explain. “In other words, self-employment was an option for these individuals, not a necessity.”
Societal needs
As life expectancy rises across the EU, pension systems are under strain. Extending work life through self-employment for older adults is one proposed solution, yet these findings indicate this path is far less accessible for precarious wage workers than for those in secure, higher-paying jobs.
For policymakers, the study’s message is clear: support for senior entrepreneurship may not reach those who could benefit most. The research also reveals that, for older workers in precarious jobs, switching to self-employment is less appealing than moving to another wage-paying role.
The reluctance stems in part from a loss of security: “One reason older workers in insecure jobs avoid self-employment is the potential loss of unemployment benefits if their business fails. In many countries, self-employed individuals cannot access public unemployment insurance, and private options are often prohibitively expensive,” the researchers note.
