From steady wages to the self-employment advantage: elderly non-union workers transitioning to self-employment, income and well-being

Purpose Union membership and age interact in their association with late-career employment transitions, yet their combined association with self-employment decisions and subsequent economic outcomes remain understudied. This study aims to examine how union membership is associated with transitions to self-employment for individuals aged 50 and above compared to those under 50 and to analyze the subsequent impacts on income and health outcomes. Design/methodology/approach Using a longitudinal approach with two-wave data from the Current Population Survey Annual Social and Economic Supplement (CPS-ASEC), we analyze 58,813 individuals across a 26-year period (1997–2022). The study employs OLS regression with extensive fixed effects including year-trend interactions with state, county, occupation and industry variables, alongside comprehensive robustness checks including disaggregated self-employment analysis and alternative clustering specifications. Findings Non-union individuals aged 50+ demonstrate significantly higher self-employment transition rates compared to their unionized counterparts. These transitions are associated with substantial income declines but show no discernible association with health. The associations are robust across poverty levels and state political contexts, with particular salience among male workers. Disaggregated analysis reveals that unincorporated self-employment is associated with these patterns, with larger income losses compared to incorporated ventures. Originality/value This study provides novel evidence on the protective role of union membership in late-career employment stability by demonstrating how institutional protections are associated with both self-employment propensity and economic outcomes among older workers. The findings contribute to understanding cumulative disadvantage processes and highlight policy implications for supporting vulnerable older workers in an era of declining union membership.