Just the facts, please

Posted Wednesday, July 11th, 2012| Comments (1) rule
Fact-finding made easy with Sloan Center resources
Betty Eckhaus Cohen, MPH, MLS
Information Services Specialist
Sloan Center on Aging & Work, Boston College
Phone: 617.552.1181
Email: betty.cohen@bc.edu

At the Sloan Center on Aging & Work, one of our mandates is to collect information about issues that concern us and organize it online so that anyone who shares our interests—certainly researchers, employers, employees, and policy makers—can find answers to their questions. Every week, we review reports and articles from reputable sources, evaluate the soundness of the research methods on which newly reported findings rest, and hold onto findings that are supported by the evidence presented. We post these “facts” to a searchable database available to the public. Each fact in the database is accompanied by a full citation, a brief description of the study methods and data used, and a link to the original source.

The vetting process is solid and straightforward. So why is it that some facts seem to contradict others? And when we’re confronted with facts that don’t jibe, how can we reconcile them to settle a perplexing question?

Consider this question, for example:
We’ve been hearing a lot about older adults who have lost their jobs during the economic downturn and then, unable to find a new job, have become self-employed or launched their own businesses. These stories create a perception that self-employment and entrepreneurship among older adults are on the rise because of the recession. Is this true? Does the evidence support the perception?

Now consider the following two facts on self-employment recently posted to our database.

FACT:

According to a 2012 analysis of BLS statistics, “the number of older [age 55+], unincorporated self-employed workers in nonagricultural industries increased from fewer than 2.6 million in December 2007 to almost 2.9 million in March 2012.” While the number has increased, the percentage of older workers who are self-employed has remained about the same: 9.7 percent in March 2012, compared to 10 percent in December 2007. (p. 6)

Source:
Rix, S. E. (2012). The employment situation, March 2012: Unemployment rises for older workers. (Fact Sheet No. 255). Washington, DC: AARP Public Policy Institute. Retrieved from http://www.aarp.org/content/dam/aarp/research/public_policy_institute/econ_sec/2012/The-Employment-Situation-March-2012-AARP-ppi-econ-sec.pdf

Description:
Statistics in this Fact Sheet are from U.S. Department of Labor, Bureau of Labor Statistics (BLS), The Employment Situation–March 2012, USDL-12-0614 (Washington, DC: BLS, April 6, 2012)

In other words, the rate of self employment among older adults (age 55 and up) stayed about the same from 2007 to 2012, although the total number of people in this age group who are self-employed increased.

FACT:

According to a 2012 analysis of Current Population Survey (CPS) data by the Kauffman Foundation of entrepreneurial activity rates by age group, “the youngest age group (ages 20–34) experienced an increase in business creation rates from 2010 to 2011, rising from 0.26 in 2010 to 0.27 in 2011. From 2010 to 2011, both the 35–44 and 55–64 age groups experienced large drops in rates [from 0.40% to 0.33%], and the 45–54 age group experienced an increase in entrepreneurial activity [from 0.35% to 0.37%].” (Table 4, p. 11)

Source:
Fairlee, R. W. (2012). Kauffman index of entrepreneurial activity 1996-2011. Kansas City, MS: Kauffman Foundation of Entrepreneurship. Retrieved from http://www.kauffman.org/uploadedFiles/KIEA_2012_report.pdf

Description:
This analysis is based on data from a variety of sources including wealth-to-income patterns by age group from the 1983-2007 Federal Reserve Surveys of Consumer Finances (SCF). For defined benefit pension income, the projections are based on amounts reported by survey respondents. For Social Security, benefits are calculated based on current and most recent earnings reported in the SCF and a fitted earnings profile constructed from Health and Retirement Study data.

So this study finds that entrepreneurial activity among older adults (between the ages of 55 and 64) decreased from 2010 to 2011.

Comparing analyses from different sources can be tricky, because investigators don’t define the concepts they are examining in the same way. Here, for example, self-employment and entrepreneurship mean different things. The U.S. Bureau of Labor Statistics (BLS) counts workers as “self-employed” if they’re employed in their own business, profession, trade, or farm but have not incorporated these enterprises. (When self-employed workers incorporate, the BLS considers them to be employees of the corporations and classifies them as wage and salary workers.) The Kauffman Foundation defines entrepreneurial activity as the creation of new businesses—not their maintenance in the years following. Thus, the figures Kauffman cites (drawn from monthly surveys conducted jointly by the U.S. Census Bureau and the BLS) are the percentage of the adult, non-business-owner population that starts a new business.

Given the two facts shown above, we can say that while the rate of unincorporated self-employment among older adults has stayed about the same over the past three years, older adults started new businesses at a somewhat slower rate during the past year. With respect to our question, “Is entrepreneurship among older adults on the rise because of the recession?” the evidence presented here combines to suggest that the answer is “no.”

But two facts from two different sources are not really sufficient to answer a question. One must look instead for clusters of facts that trend one way or another. To help you do just that, the Sloan Center’s database holds 95 facts (as of today) covering a twelve-year period of research on the topic of “self-employment, consulting, and contract work.” And there are 48 other topics, each with its own rich and growing repository, ready to be mined.


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One response to “Just the facts, please”

  1. This is a great piece. It’s very hard sometimes to figure out how to interpret data. Your Fact boxes are great, and your commentaries/conclusions about these “facts” are very helpful. Thank you!