Abstract
The ‘silver tsunami’ of Baby Boomers suggests that the United States will increasingly face a declining number of heirs for entrepreneurs seeking to retire. Unmet, this challenge risks acquisition or outright closure of firms, potentially disrupting continuity of production, supply, and local community employment. This demographic shift is multifactor, with falling family sizes compounding retirement of Baby Boomers. Yet, an aging workforce and population decline give opportunity to increase the share of employee-owned firms in the U.S., such as employee stock ownership plans. Closing their business or selling to outside interests risks workforce reductions, outright relocation, loss of local goods and services, and jeopardizes tax revenue. Alternatively, retiring owners can sell the going concern to their existing employees, with potential to defer taxes. This essay asks three questions in exploring these issues. First, how do employee-owned firms typically perform? Second, why do we see so few employee-owned firms? And third, will the ‘silver tsunami’ proliferate employee-owned firms?