Early Retirees As the Next Generation of Entrepreneurs

Abstract

In this article, we combine perspectives from labor economics and entrepreneurship to examine early retirees’ decision to become self–employed. Many individuals leave career employment before the traditional age of 65 and return to the labor market for a period of time before they fully retire. This phenomenon is referred to in the labor economics literature as bridge employment. Initial research of bridge employment has identified entrepreneurial activities to be common. The authors argue that first early retirees have to make the decision whether to permanently retire or to continue their labor force participation. If they decide to return to work, then self–employment is one option. Using the theoretical foundations of entrepreneurship, the authors outline the factors that would influence the self–employment choice and the types of entrepreneurial paths emanating from that choice.