Entrepreneurship takes a big jump at age 65. Guess Why?

[jtuck004]

35. "... We were concerned about other confounding factors that might lead to shifts in

employment behavior at age 65 such as eligibility for Social Security or for pensions.
Zissimopolous and Karoly (forthcoming) find that among individuals over age 50, those who had
experienced a pension cash-out were more likely to transition from wage and salary work to selfemployment.
Social Security eligibility does not appear to generate shifts in employment
behavior precisely at age 65. The minimum retirement age for full Social Security benefits was
65 for individuals born in 1937 or earlier (i.e., those reaching eligibility before 2003) and is
gradually increasing for later birth cohorts to age 67 for those born after 1959. The earliest age
of eligibility for Social Security benefits is 62; benefits received by individuals at that point are
reduced (in an actuarial neutral way) relative to what would be received if one were to retire at
the full retirement age. Data reveal that individuals are far more likely to begin claiming benefits
at age 62 than at age 65. A majority of Americans (59 percent of women and 56 percent of men)
receiving Social Security benefits for the first time in 2004 were age 62. A smaller fraction of
those claiming benefits (17 percent of women and 23 percent of men) were age 65 (Munnell and
Sass, 2007). Similarly, age 65 does not appear to be a primary focal point for the accrual or
availability of pension wealth. Under defined contribution retirement plans, pension wealth
accrual does not vary substantially by age; pension wealth continues to increase as long as a
person works. The critical age for individuals covered under defined contribution plans is 59.5
because at that age individuals can begin withdrawing from a 401(k) without penalty (Friedberg
and Webb, 2003). Under defined benefit plans, pension wealth accrual peaks at the age of early
retirement eligibility, which is well before age 65. Pension wealth may continue to increase up to
age 65 (Friedberg and Webb, 2003; Poterba, Venti, and Weiss, 2001).

A paragraph from that study, here.

So while it looks like they have some source of income, small, the availability of health insurance appears to be the thing that causes them to finally pull the trigger.

I read through it briefly, but I don't see yet if they identified people by whether SS was the only source of income for what percentage of business starters. According to the SS admin, a little more than 1 in 4 (now likely higher) people have virtually no other income than SS. I wonder if they are more or less likely to try this, since in most cases, except for some service businesses, they must also have at least a little capital to can invest.