Document Type
Article
Publication Date
6-10-2006
Abstract
While much recent national public attention has focused on the widespread replacement of large corporations' defined-benefit pension plans with defined-contribution plans, far less attention has been given to the deficiencies concerning retirement plans for employees of small businesses. As almost 50% of United States workers are employed in these small businesses, the future ramifications of an aging workforce with no retirement savings could have serious economic consequences. The objective of this study is to advance the understanding of the factors influencing small business owners in their decision to offer or not offer a retirement plan for the benefit of themselves and their employees. This paper explores concepts which may help explain how a small business owner approaches decision making concerning employee benefits. Several studies have focused on the economic incentives gained by the employer such as enhancing employee recruitment and retention, and economic disincentives such as navigating complex government regulations. However, the small business owner may be as affected by other behavioral economic influences. Social exchange relationship, locus of control, self-efficacy and discount theories may also be relevant in understanding the motivations of the small business owner. By studying the factors which might influence the decision of whether to implement a plan, it may be possible to discover ways to encourage more small business owners to establish retirement plans and therefore, enhance the possibility that the employees of these businesses will be able to successfully retire in the future. This research will contribute to the literature on behavioral finance, entrepreneurial behavior and social exchange relationships.
Keywords
small business -- economic aspects -- United States
Rights
© The Author(s). Kelvin Smith Library provides access for non-commercial, personal, or research use only. All other use, including but not limited to commercial or scholarly reproductions, redistribution, publication or transmission, whether by electronic means or otherwise, without prior written permission is strictly prohibited.
Department/Center
Design & Innovation
Recommended Citation
McCullough, Jill B., "An Uncertain Future: Economic and Behavioral Influences that Motivate Small Business Owners in the Decision to Adopt an Employee Retirement Plan" (2006). Student Scholarship. 79.
https://commons.case.edu/studentworks/79