Money’s not everything for late business starters

Published: 7 March 2017 at 16:00

Woman using a laptop

Report shows over-50s who become self-employed enjoy better quality of life

People aged 50 or over who leave their jobs to become self-employed enjoy a better quality of life – enough to accept a significant reduction in income – according to new research published in the Journal of Business Venturing.
Professor Teemu Kautonen, of Anglia Ruskin University, alongside colleagues from Syracuse University, United States, and Aalto University, Finland, examined the benefits of late-career entrepreneurship – which is promoted by policy makers as one of the measures to tackle the challenges of an ageing population.
The authors examined data from the English Longitudinal Study of Ageing to see how older workers’ levels of income and quality of life changed in response to a career transition – either to a new job or from paid employment to self-employment.
The study found that switching to entrepreneurship later in life allows people to better control the amount of pace of work and to be more flexible in realising their own work-life balance. These benefits, along with increased levels of control and autonomy, are enough to compensate for a loss of income.
Kautonen, Professor of Enterprise and Innovation at Anglia Ruskin, said: 

“This study suggests that promoting late-career switches to entrepreneurship is not only fulfilling for the individual, but socially sustainable.
“The ageing of the world population will be one of the greatest challenges in the coming decade and evidence suggests that not only are self-employed people likely to work for longer and therefore contribute to the system rather than depend on it, but they will get more satisfaction out of doing so.

“It is true that people switching to entrepreneurship will often take a financial hit, but these results show that the increase in the quality of life more than makes up for this.”

Read the full, open access paper.