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Continuity and change in the Community Development Employment Projects Scheme (CDEP).

Introduction

The Community Development Employment Projects (CDEP) scheme has long been an important feature of the labour market for Indigenous Australians, particularly in remote and regional areas. The scheme involves participants working for a notional equivalent of their income support payment. The design of the scheme changed little from its creation in 1977 until 2009. CDEP organisations were allocated funding to pay the wages of CDEP participants at a level similar to income support payments, supplemented with administrative and capital support. This funding has been used as a means to provide employment, training (informal and formal), activity, enterprise support and income support to Indigenous participants. The scheme has always had a strong community employment and community development focus and, since the late 1980s, has progressively acquired a labour market program objective of increasing the job readiness of participants. This focus especially emerged during the late 1990s. (1)

CDEP participants qualify for additional income above their income support entitlement in the form of a CDEP 'participant supplement'. In 2008 this was $20.80 per fortnight. Historically the income test applied to CDEP payments has been more generous than the income test applied to income support payments (such as Parenting Payment and Newstart) and the rate at which CDEP payments were reduced as non-CDEP income increases has been lower than was the case for income support payments. (2)

From its creation in 1977 CDEP expanded to have over 35,000 participants at its peak in 2002-03. Since then the number of CDEP participants has declined. The scheme was progressively withdrawn from non-remote areas from 2007, a process which was completed by 2009 (ANAO 2009). Collectively these changes have seen the number of participants decrease from about 35,200 in 2002-03 to about 10,500 in 2011. (3) From mid-2013 the new Remote Jobs and Communities Program will bring together the Community Development Employment Projects, Job Services Australia, Disability Employment Services and the Indigenous Employment Program into a single integrated service (Australian Government 2012) and CDEP, at least as it has historically operated, will cease to exist. (4)

The scheme has been a hotly debated Indigenous policy issue over the past 15 years. On the one hand it has been argued that the scheme provides a cost effective way of providing both community development and labour market program type objectives for Indigenous Australians, particularly those without the skills or desire to find non-CDEP employment or those living in areas with very few non-CDEP labour market opportunities (Altman & Gray 2005; Altman 2007). On the other hand it has been argued that the scheme has acted as a disincentive for participants to find non-CDEP employment and had become a destination rather than a stepping stone to non-CDEP employment (see, for example, DEWR 2005; Hudson 2009). Other researchers and commentators have argued that while CDEP may provide a range of community and social benefits, it can also act as a disincentive to investing in education and finding paid employment (Pearson 2007; Hunter 2009).

This paper addresses two research questions. The first is what was the nature of CDEP employment in 2008 and did the characteristics of such work change between 1994 and 2008? The second question is how did the social and economic outcomes of CDEP participants compare to people in other labour force states (employed outside of CDEP, unemployed and not-in-the labour force (NILF)) and did these change between 1994 and 2008? The social and economic outcomes examined have been selected to represent a range of aspects of wellbeing and are those previous research suggests CDEP may impact on (Altman et al. 2005; Hunter 2009).

These research questions are of interest for several reasons. First, they are important for interpreting the trends in Indigenous employment. This is because the Australian Bureau of Statistics (ABS) has generally classified CDEP participation as equivalent to other forms of paid employment. Gray and Hunter (2011) find that if CDEP is classified as employment then there has been little, if any, growth in the employment rate of Indigenous people, whereas if CDEP is not classified as employment then there has been strong growth in the Indigenous employment rate over this period. Whether or not Indigenous employment increased over this period is critical to assessments made about the success or otherwise of government expenditure aimed at increasing Indigenous rates of employment.

Second, the CDEP scheme provides an important example of an employment program which had direct employment objectives, labour market program type objectives and community development objectives. Understanding the economic and social impact of CDEP on participants is thus of relevance to the design of future labour market programs which may have both labour market and community development type objectives. Third, for future comparison, the analysis presented here provides a useful baseline for CDEP employment and the associated economic and social outcomes evident just prior to the substantial changes to the scheme from July 2009.

This paper is structured as follows. The next section provides information on the changes to the number of CDEP participants since 1994 and describes the characteristics of CDEP jobs and how they have changed. This is followed by a comparison of social characteristics and experiences of CDEP participants and those of the non-CDEP employed, unemployed and those not in the labour force (NILF). The associations between CDEP participation and a range of social and economic outcomes is then estimated and compared to the outcomes for the non-CDEP employed, unemployed and those NILE The paper concludes with a discussion of the implications for policies that aim to close the gaps in social and economic outcomes for Indigenous and other Australians.

Number of CDEP participants

The number of CDEP participants and their proportion of the Indigenous working age population over the period 1997-2010 is shown in Figure 1. The number of Indigenous CDEP participants has declined from a peak of around 35,200 participants in 2002-03 to 10,300 participants as at 30 June 2010. As a proportion of the working age population the proportion in the CDEP scheme has fallen for men from 1997, while for women it has fallen from about 2005. (5)

The decline in the proportion of the working age Indigenous population in the CDEP scheme over the period 1997-2005 is a consequence of a 'cap' being applied to the number of CDEP places funded. The decrease in the number of places from 2006 is to a large extent a consequence of the closing down of urban and regional CDEP schemes.

Characteristics of CDEP jobs

This section describes the data on the nature of CDEP jobs and considers the extent to which information is comparable between 1994 and 2008. The analysis is based upon data from the 1994 National Aboriginal and Tortes Strait Islander Survey (NATSIS) and the 2008 National Aboriginal and Tortes Strait Islander Social Survey (NATSISS). The 2008 NATSISS and its forerunners--the 1994 NATSIS and the 2002 NATSISS--are the only large-scale surveys providing national representative samples of Indigenous Australians which reliably identify CDEP participants. The NATSIS 1994 and NATSISS 2008 were conducted by the Australian Bureau of Statistics (ABS) and involved 15,271 and 13,307 respondents respectively. (6) Unless otherwise indicated, the following analysis is restricted to the working age population aged between 18 and 64 years. In the text, the word 'significant' is only used where the difference between estimates is statistically significant at the five per cent level.

Given the progressive reduction and ultimate withdrawal of CDEP from urban and regional areas since 2007, the analysis of changes in the economic and social outcomes associated with participation in the CDEP scheme are analysed both for Australia as a whole and specifically for remote regions.

The characteristics of CDEP jobs examined are: average hours usually worked each week; under-employment (worker prefers to work more hours); whether the participant has more than one job (multiple jobs); the extent to which work allows family and cultural obligations to be met; and personal income (gross weekly income from all sources). These characteristics have been chosen because they are important characteristics of jobs and are available from both the 1994 NATSIS and the 2008 NATSISS.

Hours worked

The majority of CDEP jobs were, and remain, part-time with average usual weekly working hours not changing significantly between 1994 and 2008. Average hours worked per week were 23.4 hours in 1994 to 23.8 hours in 2008 (Table 1). According to the program design, CDEP participants are supposed to work around 15 hours per week in order to receive the standard CDEP payment. The fact that, on average, CDEP participants work 23 to 24 hours per week (about 8 hours extra per week) probably reflects the fact that some participants work extra hours for CDEP 'top-up' and some participants also held a non-CDEP job. (7)

The distribution of hours worked by CDEP participants in 1994 and 2008 is shown in Figure 2. The overall distribution of hours worked is very similar in 1994 and 2008 for both males and females. (8) Between 1994 and 2008, the proportion of CDEP participants working full-time (35 hours per week or more) increased slightly for males (from 14 per cent to 19 per cent) and was unchanged for females (27 per cent and 28 per cent in 1994 and 2008 respectively).

Under-employment and multiple jobs

CDEP participants have higher rates of under-employment than other Australian workers (see ABS 2011). In 2008, about one-third of CDEP participants indicated that they would like to work more hours (34.4 per cent). Within the Indigenous population, the rate of under-employment among CDEP workers was generally lower than that among non-CDEP workers as whole, although the rate of under-employment for CDEP workers was similar to that for part-time non-CDEP workers (of whom 39 per cent said that they would like to work more hours).

Under-employment among CDEP participants, on average, decreased slightly between 1994 and 2008. The decrease applied to a wide range of CDEP participants, including males and females, younger and older, and those in remote and non-remote areas. In contrast, the level of under-employment among non-CDEP workers was similar in 1994 and 2008. It is unclear why this difference has occurred.

There were significant increases in the proportion of CDEP workers with more than one job for those over 35 years of age, but not for those under 35 years. The incidence of holding multiple jobs among non-CDEP workers was only slightly higher than among those in CDEE

This suggests that there may have been some changes in the composition of CDEP jobs, with the proportion of CDEP participants holding more than one job having increased and the proportion under-employed having decreased. The decrease in under-employment is probably a result of people who wanted to work more hours taking up increased employment options in the relatively strong labour demand which occurred over most of the period 1994-2008 (Hunter & Gray 2012a).

Ability to meet cultural obligations

The proportion of CDEP employees who say that working in the CDEP scheme allows them to meet their cultural obligations is higher than Indigenous people employed in non-CDEP jobs (in 2008 it was 82.6 per cent for CDEP participants and 40.8 per cent for those in non-CDEP jobs). Between 1994 and 2008, the proportion of CDEP participants who said that they could meet cultural obligations increased from 68.7 per cent to 82.6 per cent (Table 1). The changes in the proportion of CDEP participants who indicated that work allowed their cultural obligations to be met increased in both remote areas and non-remote areas, and hence cannot be explained by the withdrawal of CDEP from urban and regional areas.

Personal income

Previous research has found that CDEP participants have somewhat higher average incomes than people who are unemployed or NILE This is a consequence of the CDEP 'participants supplement' and the more generous income test applied to CDEP participants than is applied to those receiving income support payments. However, CDEP participants have also been found to have substantially lower income than the non-CDEP employed.

Information on gross personal income in 1994 and 2008 by labour force status is provided in Table 2. There are several key points to take from Table 2. First, as expected, personal incomes of the non-CDEP employed were much higher than for those in the other labour force categories. This was true in both 1994 and 2008 and in remote and non-remote areas. Second, in both 1994 and 2008 the personal income of CDEP participants was substantially higher than that of the unemployed or those NILE For example, in 2008 in remote areas the income of CDEP participants was $359, which was substantially higher than the weekly income of the unemployed in these areas ($231) and those NILF ($228).

Third, between 1994 and 2008 the weekly income of CDEP participants in remote areas was basically unchanged at around $360 (in 2008 dollars). (9) Fourth, the income of the non-CDEP employed increased between 1994 and 2008 in real terms. For example, in remote areas it increased from $697 to $845 per week over this period (a real increase of 21 per cent). Given that CDEP incomes have not increased, CDEP income as a percentage of non-CDEP income has fallen substantially over this period. For example, in remote areas CDEP income was 51 per cent of the income of the non-CDEP employed in 1994, and by 2008 it had fallen to 43 per cent.

Duration on CDEP and permanency of CDEP jobs

The 2008 NATSISS collected information on a number of other characteristics of CDEP jobs which were not collected in the 1994 NATSIS. This section focuses on:

* whether the main part of a participant's job is part of the CDEP scheme

* the total number of years spent in paid employment (CDEP plus non-CDEP employment) * the length of time in current job

* whether the participant considers their CDEP job to be a permanent job, and

* whether the participant has been on CDEP for more than two years.

Historically CDEP participants have been more likely than other Indigenous workers to be male, relatively young and heavily concentrated in remote areas (Altman et al. 2005). Consequently, these characteristics are disaggregated by gender, age and geographic remoteness (Table 3). On average, CDEP workers have spent more than 10 years in the workforce, a not inconsiderable level of experience. The only group for which this was not the case was the under 35 year olds who had an average of 6.5 years in paid employment. Younger non-CDEP workers also tended to have similarly lower levels of experience. This is explained by the fact that younger people have obviously had less opportunity to gain experience. Hence the observation that CDEP workers had about five years less experience in paid employment than non-CDEP scheme workers appears largely to be due to the younger age profile of CDEP workers.

The pattern of time spent in current job was consistent with the overall experience in paid employment. That is, those CDEP workers with longer overall workforce experience tended to have had a longer duration in their current job. However, some groups had had a greater proportion of their labour market experience in the current (CDEP) job. Younger and female participants, especially those living in remote areas, seemed to be more reliant on CDEP scheme work as part of their overall workforce experience than comparable groups of non-CDEP scheme workers (see Hunter & Gray 2012b).

The NATSISS 2008 data indicates that two-thirds of CDEP participants considered their job to be permanent. While it is not entirely clear how to interpret the term 'permanent' here, in nearly all categories over 50 per cent of CDEP workers had been in their current CDEP scheme job for over two years (Table 2). (10) To put this in context, an even higher proportion of non-CDEP workers considered their job to permanent (more than 80 per cent).

Occupations of CDEP participants and the non-CDEP employed

A lack of data to date has meant that there has been only a very limited analysis of the occupations of CDEP participants and how they compare to the occupational distribution of the non-CDEP employed. The Census, while providing detailed information on occupation, does not reliably identify CDEP employment across Australia and so it has not been possible to obtain reliable national estimates of the occupation distribution of CDEP participants. The 1994 NATSIS and 2002 NATSISS did not provide information on occupation. However, for the first time, the 2008 NATSISS provided detailed information on occupation which can be used to estimate the occupational distribution for CDEP participants and the non-CDEP employed.

Comparing the occupations of CDEP participants and non-CDEP employed is one way of understanding the substantial differences in the nature of CDEP and non-CDEP employment (Table 4). Overall, CDEP participants were more likely to be working in lower skill level occupations than the non-CDEP employed

(Table 3). For example, half of male CDEP workers were labourers (50.4 per cent) compared to a quarter of Indigenous men in non-CDEP employment who were working as labourers (24.6 per cent). Nonetheless, there was little difference in the proportion of CDEP participants and Indigenous non-CDEP employed who are in professional occupations.

One way to summarise this difference in occupational distribution is to use a segregation index which measures the degree to which the occupational distributions differ on a scale of zero (no difference) to 100 (maximum difference). Table 4 provides estimates of the segregation index comparing the occupational distributions of Indigenous males and females in CDEP to those in non-CDEP employment and to those of the non-Indigenous employed.

The segregation indexes clearly illustrate the extent of the difference in the occupational distribution of the CDEP participants and the non-CDEP employed. The segregation indexes comparing Indigenous to the non-Indigenous are substantially higher for CDEP participants than for the non-CDEP employed. For example, the segregation index indicates that 41.9 per cent of Indigenous males participating in the CDEP scheme would have to change occupations to be employed in similar sorts of jobs as non-Indigenous workers. In contrast, 26.2 per cent of Indigenous males in non-CDEP employment would have to change jobs to have the same occupational distribution as non-Indigenous workers. The segregation indexes are lower for Indigenous women than Indigenous men, indicating that fewer women would have to change occupation to achieve the same occupation distribution as non-Indigenous women than men would to change occupation to achieve the same occupational distribution as non-indigenous men. For example, 33.8 per cent of Indigenous women participating in the CDEP scheme would have to change occupation in order to have the same occupational distribution as non-Indigenous women, compared to 41.9 per cent of Indigenous men having to change occupation in order to have the same distribution as non-Indigenous men.

Selected social characteristics of CDEP participants and community development

This section focuses on a range of social characteristics of CDEP participants and how the CDEP employed compare to the non-CDEP employed, unemployed and those NILF (as shown in Table 5). Because by 2008 the vast majority of CDEP participation was in remote areas, the analysis in this section is restricted to people living in remote areas.

Two sets of social characteristics are examined. The first set relates to participation in cultural activities and connection to culture. The specific measures analysed are whether the individual speaks an Indigenous language, lives on homelands/traditional country and/or engages in hunting and gathering. These variables are interesting because, historically, a feature of CDEP has been that the scheme gives the flexibility and time for participants to engage in customary cultural activities. In some cases, CDEP activities can involve customary activities including land management practices. Other variables are whether respondents are studying and the extent of their input into community decisions on important issues.

The second set of variables relates to the experience of discrimination: whether respondents felt discriminated against in the previous 12 months and whether respondents felt discriminated against in the previous 12 months because of work (or in the process of looking for work). Given that the vast majority of CDEP participants are Indigenous, it is possible that CDEP participants experience lower levels of discrimination than Indigenous workers in non-CDEP jobs (because there is a relatively low likelihood of inter-racial interactions in CDEP workplaces). Several studies have found that some CDEP participants find CDEP employment is within their 'comfort zone' (for example, Smith 1994; ATSIC 1997). Finally, the extent to which the participants had little or no say within their community on important issues is analysed.

A higher proportion of female CDEP participants spoke an Indigenous language (72 per cent) compared to Indigenous women in the other categories in remote areas (Table 5). The unemployed and NILF were less likely to speak an Indigenous language than the CDEP participants (50 per cent and 53 per cent respectively), but more likely than the non-CDEP employed (39 per cent). The pattern of results is similar for Indigenous males.

There is a similar pattern of results for living on traditional country (or homelands) as for speaking an Indigenous language. Over 60 per cent of Indigenous women participants in CDEP lived on traditional country compared to around 40 per cent of other Indigenous women living in remote areas. For Indigenous men, CDEP participants were less likely to live on country than Indigenous women participants in CDEP (54 per cent) but they were still more likely than other Indigenous men to live on traditional country.

Similarly CDEP participants were highly likely to engage in hunting and gathering, with over four-fifths of women and men being involved in this form of non-market household production (82 per cent and 86 per cent respectively). While hunting and gathering is the norm in remote areas, women and men in other labour force categories tended to be significantly less likely to engage in this activity. The non-CDEP employed were the group least likely to hunt and gather (56 per cent and 76 per cent for women and men respectively). However, it should be noted that, as a group, engagement in these activities by non-CDEP employed respondents was not significantly different from that evident for women and men who are NILF.

A large and substantial number of Indigenous people felt discriminated against irrespective of labour force status, with over one-quarter of working age adults reporting discrimination in the previous 12 months. For both males and females the unemployed were more likely to report being discriminated against in the last 12-months than other Indigenous people because they were exposed to more potential discriminators in the process of job search (Biddle et al. 2013). While female CDEP participants were less likely to experience any discrimination than other Indigenous females, male CDEP participants were actually significantly more likely than NILF males to be discriminated against in the previous 12 months (29 per cent and 20 per cent respectively).

Another useful comparison is between the discrimination reported by CDEP and non-CDEP workers. For females, non-CDEP employed are more likely to report any discrimination than CDEP participants (33 per cent and 22 per cent); a substantial proportion of this differential is due to the different rates of reporting discrimination because of work (8 per cent and 4 per cent). In contrast there is no significant difference in the male rates of reporting discrimination between CDEP and non-CDEP employed, with around 30 per cent reporting any discrimination in the previous 12 months and less than 10 per cent specifically identifying labour market discrimination.

Participants in the CDEP scheme were less likely than the unemployed or those NILF to say that they had little or no say within their community on important issues. The CDEP and non-CDEP employed were similarly likely to say that they had little or no say within their community on important issues.

In terms of the social characteristics of CDEP participants, the observations above generally confirm the distinct nature of much CDEP scheme work, which often involves customary practices and which has been found in other studies (such as Altman, Biddle & Buchanan 2012). However, the data only provide weak evidence that CDEP employment was more consistent with Indigenous preferences than non-CDEP employment (that is, within some sort of 'comfort zone'). While discrimination was less evident among female CDEP participants than among female non-CDEP employed, the reporting of discrimination was not that different between the respective categories of employed males. Similarly the sense of efficacy within the community was not significantly different between CDEP and non-CDEP employed.

The associations between CDEP participation and social and economic outcomes

The association between CDEP employment and a range of economic and social outcomes has been the subject of a number of studies (for example, ATSIC 1997; Altman et al. 2000; Altman et al. 2005; Hunter 2009). After controlling for basic socio-demographic characteristics, these studies generally found that CDEP participants have slightly higher incomes and fare somewhat better on a range of social indicators than the unemployed or NILF Indigenous people, but that participants have considerably poorer outcomes compared to the non-CDEP employed. These studies have mostly been based on the 1994 NATSIS, 2002 NATSISS and census data. This paper is the first analysis of this question using the 2008 NATSISS.

Empirical approach

It is very difficult (or impossible) to identify the causal impacts of participation in the CDEP scheme on the wellbeing of participants. This is because we do not know what their wellbeing would have been if they had not been participating in the scheme (that is, the counterfactual). The approach taken in this paper (and other studies, such as Hunter 2009) is to compare the wellbeing of CDEP participants with people in other labour force states.

The associations between labour force status (CDEP, non-CDEP employed, unemployed and NILF) are estimated using multivariate regression models. The regression models allow the associations between labour force status and wellbeing to be estimated while holding constant the effects of other variables which might impact upon wellbeing independent of labour force status. Several categories of outcomes are analysed. The first set relates to crime and safety: whether respondents have been arrested, whether they live in a violent neighbourhood and/or whether they have been a victim/survivor of crime. The second set of variables comprises financial measures: whether respondents have experienced financial stress and/or have a low household income. The third set relates to health: whether respondents have a disability and/or whether they have fair or poor health. The final outcome modelled is whether a person was currently studying. These outcome measures of wellbeing are all coded as binary variables (zero/one) and thus the logistic statistical model is appropriate.

This analysis extends and updates estimates of the associations between labour force status and wellbeing using the 2002 NATSISS (Hunter 2009). The only differences in the measures of wellbeing analysed here to those analysed by Hunter (2009) are that the earlier study examined substance use, about which data are not available from the 2008 NATSISS data; and this paper includes a measure of living in a low income household a measure not examined in the 2009 study.

The explanatory variables included in the regression model have been selected to match as closely as possible to those used by Hunter (2009), in order to compare the extent to which the associations between CDEP participation and the various measures of wellbeing changed between 2002 and 2008.

The relationship between labour force status and the measures of wellbeing are captured by including labour force status as an explanatory variable (specified using a set of dummy variables for being CDEP employed, non-CDEP employed, unemployed and NILF). A range of other explanatory variables are included in the model to control for human capital, demographic, early life experience and other factors which may impact on wellbeing independent of labour force status. Other explanatory variables included in the regression models are age (and age squared in order to capture any non-linear relationship between age and wellbeing), sex, highest level of educational attainment, whether respondent lives in a household with both Indigenous and non-Indigenous residents (mixed household), whether he or she has a partner, whether there are children resident in household (and the interaction between having a partner and children being resident), whether the household has more than one family resident in dwelling, whether the respondent was taken from family as a child (stolen generation), proficiency in English, whether the respondent speaks an Indigenous language, their highest level of educational attainment and geographic remoteness by State of residence. Details of the explanatory variables are provided in Appendix Table A.1.

Regression results

The non-linear nature of the logistic regression models means that interpreting the magnitude of the coefficient estimates is difficult. In this paper we illustrate the estimated impact of being in each labour force state on the respective outcome measures, using marginal effects. The marginal effects show the change in the predicted probability of social or economic outcomes of moving from unemployment to the other labour force states (CDEP employed, non-CDEP employed or NILF). The predicted probabilities are calculated holding constant the value of the other explanatory variables at the sample means. Table 6 shows the estimated marginal effects and the base probability, which is the predicted probability of each outcome variable for an unemployed person with the average characteristics in the sample. Summary statistics for the regression models are provided in Appendix A. The full regression results are reported in Hunter and Gray (2012b).

There are statistically significant differences in the social and economic outcomes of CDEP participants compared to the unemployed and those NILE The CDEP employed are 5.8 percentage points less likely to have been arrested than the unemployed, 5.5 percentage points less likely to have been a victim of actual or threatened physical violence than the unemployed, 6.3 percentage points less likely to have experienced financial stress than the unemployed, 26.6 percentage points less likely live in a low income household than the unemployed and 6.8 percentage points less likely to report having fair or poor health status than the unemployed.

These findings--that CDEP participants have higher levels of wellbeing than the unemployed--are largely consistent with the estimates of Hunter (2009) using the 2002 NATSISS. The main difference is that in examining the 2008 data, there are no statistically significant differences between CDEP participants and the unemployed in terms of studying, living in a violent neighbourhood, and having a disability. By contrast, Hunter (2009) found that in 2002 the differences between CDEP employed and the unemployed were statistically significant for those outcomes. It is possible that the changes between 2002 and 2008 reflect a change in the nature of CDEP work. If CDEP was becoming more like a mainstream work-for-the-dole scheme or a standard employment program and less like a community development program, then one might have expected that outcomes would align more with those for the unemployed and NILF categories. It may also be a reflection of changes in the types of people in CDEP employment between 2002 and 2008. (11)

While CDEP participants have better outcomes on a range of economic and social measures than do the unemployed, CDEP participants have much worse outcomes than the non-CDEP employed for all of the social and economic outcomes analysed. The differences between the CDEP employed and the non-CDEP employed are much larger than between the CDEP employed and the unemployed. For example, the CDEP employed are 5.3 percentage points less likely to have been arrested than the unemployed, but the non-CDEP employed are 13.1 percentage points less likely to have been arrested than the unemployed.

Conclusion

After a quarter of a century of expansion of the CDEP scheme, the number of CDEP participants has been reduced since 2002-2003 and the scheme has been gradually withdrawn from urban areas and regional centres. Indeed, the scheme operated only in remote areas after mid-2009, and from June 2013 the CDEP scheme will be incorporated into the new Remote Jobs and Communities Program. The Remote Jobs and Communities Program will bring together the CDEP, Job Services Australia, Disability Employment Services and the Indigenous Employment Program into a single integrated service. This will mean that CDEP will cease to exist, at least as it has historically operated.

This paper has described the nature of CDEP employment in 2008 and the extent to which it changed between 1994 and 2008. The paper also compares a selection of economic outcomes of CDEP participants with those of Indigenous people in non-CDEP employment, who were unemployed or who were NILE The characteristics of CDEP jobs in 2008 were very similar to those found in 1994 and the overall conclusion is that there has been little change in the fundamental nature of CDEP jobs since 1994. It has remained largely part-time employment, with virtually no change in the hours worked by CDEP participants. Correspondingly, the incomes of CDEP participants (in real terms) hardly changed over this period. While the incomes of CDEP participants were higher than those of the unemployed and those of people who were NILF, the relativity of the income of CDEP participants to that of the unemployed and those NILF was similar in 2008 and 1994. However, over this period the income of the non-CDEP employed increased more rapidly and hence the incomes of CDEP participants fell relative to the incomes of the non-CDEP employed.

The general lack of change in the characteristics of CDEP jobs or the outcomes associated with being a CDEP participant since 1994 is an important finding in the context of significant changes to both the number of participants and geographic coverage of the scheme over this period, and some changes to the rules of the scheme. One possible interpretation of this is that the CDEP scheme has been very resilient to attempts by policy makers to alter the way in which the scheme operates.

Overall, the CDEP scheme appears to give some support for Indigenous language and customary practice by providing economic activity that allows participants to live on or near their traditional country. However, the evidence that participation in CDEP improves community development through reducing discrimination or enhancing a sense of personal efficacy in important community issues is weak. Indeed, having a job is the most important thing for enhancing the sense of efficacy in the community rather than whether or not one's job is associated with the CDEP scheme.

While the data presented in this paper are consistent with the hypothesis that CDEP participation has some small positive social and health impacts, it equally could be the case that the slightly better social outcomes for CDEP participants compared to the unemployed are because those who participate in CDEP have better outcomes prior to commencing on CDEP (that is, there may be selection effects on unobservable characteristics of individuals). While it is not possible to disentangle these alternative hypotheses using the available data, it is the case that the CDEP employed have only slightly better outcomes for most measures than the unemployed and generally much worse than for the non-CDEP employed.

These findings confirm the findings of earlier research that CDEP positions are very different both in terms of 'job characteristics' and the social and economic outcomes associated with participation, compared to non-CDEP employment and therefore should not be treated as equivalent to mainstream employment.

Whether or not CDEP is treated as employment is not just of academic interest, but also crucial to assessing whether Indigenous employment has increased since the mid-1990s. As Gray and Hunter (2011) demonstrate, treating CDEP as employment leads to the conclusion that since the mid-1990s there has been little increase in Indigenous employment, whereas when CDEP is excluded from the definition of employment then the conclusion is that there has been a substantial increase in Indigenous employment.

The effect of recent policy changes depends on the extent to which former CDEP participants secure mainstream employment or move into other labour force categories. The worst case scenario is that all former CDEP participants substitute directly into unemployment, other income support arrangements or even total dependency on other people. In that case, individuals and associated households will probably experience a drop in income and encounter smaller impacts on health and social outcomes. However, some CDEP participants will find mainstream employment and for these participants there is likely to be a substantial increase in income. The net effect of the policy change is an empirical question that is yet to be answered. In the end the net impact of the demise of the CDEP scheme on social and economic outcomes will depend upon the effectiveness of the new Remote Jobs and Communities Program, other government policies and programs and the extent to which Indigenous communities are able to create and take advantage of new labour market opportunities.

While the CDEP scheme will cease to exist from mid-2013 in its current form, it appears that aspects of the scheme will live on in the new Remote Jobs and Communities Program. The analysis in this paper provides a benchmark against which the outcomes associated with the Remote Jobs and Communities Program can be compared.

Appendix Table A1: Summary statistics for logistic regression (%),
NATSISS 2008

Dependent variables

Variable                 Description                  Mean   Standard
                                                             deviation

Arrested                 Arrested in the previous 5   16.5     37.1
                         years

Violent neighbourhood    Aware of community           35.3     47.8
                         problems with violent
                         behaviour (e.g. family
                         violence, assault & sexual
                         assault)

Victim                   Victim of physical           26.1     43.9
                         violence in the previous
                         12 months

Financial Stress         Whether could raise $2000    47.9     50.0
                         cash within 2 weeks

Low household income     Household income was less    36.8     48.2
                         than half of the median
                         Australian income (i.e.
                         poor')

Disability               Has a severe or profound     8.1      27.4
                         disability

Fair or poor health      Self-assessed health         23.8     42.6
                         status is fair or poor

Studying                 Currently studying           11.9     32.3

Independent variables

CDEP                     Employed in CDEP scheme      7.3      25.9

non-CDEP employed        Employed outside CDEP        48.4     50.0
                         scheme

NILF                     Not in the labour force      35.3     47.8

Age                      Age (in years)                37       13

Age2                     Age squared                  1533      996

Mixed household          Households with both         35.6     47.9
                         Indigenous and
                         non-Indigenous residents

Partner                  Has a marital partner        57.7     49.4
                         (married or de facto)

Kids                     Children resident in         54.0     49.8
                         household

Partkids                 Interaction of Partners      34.7     47.6
                         and Child variables

Multi-family household   Households have more than    13.1     33.8
                         one family resident in
                         dwelling

Taken                    Individual taken from        9.2      28.9
                         family as a child

Difficulty in speaking   Difficulty in speaking       3.8      19.1
English                  English

Degree                   Holds a degree level         5.8      23.4
                         qualification

Other qualification      Other post-school            24.4     42.9
                         qualification

Year 12                  Completed Year 12            11.9     32.4

Year 10 or 11            Highest level of schooling   32.6     46.9
                         is Year 10 or 11

Speaks an Indigenous     Speaks an Indigenous         23.4     42.4
Language                 language

Male                     Respondent is male           42.9     49.5

Number of observations   6,449

Notes: Indigenous persons aged 18-64 years. Geography was controlled
for using 12 dummy variables that identified the disaggregated
information of where respondents lived by State and remoteness
category (classified using the standard ARIA categories), aggregated
where  necessary to preserve confidentiality by the ABS. Distribution
not reported here to save space but the summary statistics are
consistent with official ABS estimates of geographic distributions.

Source: 2008 NATSISS data (accessed via ABS RADL).


Acknowledgements

This paper was written as part of an Australian Research Council Discovery Project grant (DP110101879) entitled 'From welfare to work, or work to welfare: Will reform of an Aboriginal development program help close the employment gap?'. We are indebted to Julie Finlayson, Kirrily Jordan, Matthew James, Deidre McNally, Will Sanders, John Taylor, participants at a Centre for Aboriginal Economic Policy Research (CAEPR) seminar, the editors and three anonymous referees for comments on a previous version of this paper. Patrick Carvalho provided research assistance.

References

ABS (Australian Bureau of Statistics) (2010a) Labour Force Characteristics of Aboriginal and Torres Strait Islander Australians, Estimates from the Labour Force Survey, 2010, Cat. No. 6287.0.

--(2010b) National Aboriginal and Torres Strait Islander Social Survey, Confidentialised Unit Record File Technical Manual, Australia, 1994 Reweighted (Reissue), Cat. No. 4188.0.55.003.

--(2011) National Aboriginal and Torres Strait Islander Survey, 2008, Cat. No. 4720.0.

Altman, J. (2007) 'Neo-paternalism and the destruction of CDEP', Arena Magazine, 90, August-September, 33-5.

Altman, J., Biddle, N. & Buchanan, G. (2012) 'The Indigenous hybrid economy: Can the NATSISS adequately recognise difference?', in B. Hunter & N. Biddle (eds), Survey Analysis for Indigenous Policy in Australia: Social Science Perspectives, CAEPR Research Monograph No. 32, Canberra, ANU EPress.

Altman, J. & Gray, M. (2005) 'The economic and social impacts of the CDEP scheme in remote Australia', Australian Journal of Social Issues, 40 (3), 399-410.

Altman, J., Gray, M. & Sanders, W.G. (2000) 'Indigenous Australians working for welfare: What difference does it make?', Australian Economic Review, 33 (4), 355-62.

Altman, J., Gray, M.& Levitus, R. (2005) 'Policy issues for the Community Development Employment Projects scheme in rural and remote Australia', CAEPR Discussion Paper No. 271, Canberra, CAEPR, ANU.

ANAO (Australian National Audit Office) (2009) Evaluation of the Community Development Employment Projects (CDEP) Program Evaluation Report, Canberra, Department of Finance and Deregulation.

ATSIC (Aboriginal and Torres Strait Islander Commission) (1997) Evaluation of the Community Development and Employment Program: Final Report, Canberra, Office of Evaluation and Audit.

Australian Government (2012) Remote Jobs and Communities Program: Jobs and Stronger Communities for People in Remote Australia, Canberra, Australian Government http://www.deewr.gov.au/Employment/Consultation/ Documents/RJCP_booklet.pdf

Biddle, N., Howlett, M., Hunter, B. & Paradies, Y. (2013) 'Labour market and other discrimination facing Indigenous Australians', Australian Journal of Labour Economics, 16 (1): 91-113.

Department of Employment and Workplace Relations (DEWR) (2005) Building on Success: CDEP Discussion Paper, Canberra, DEWR. Duncan, O. & Duncan, B. (1955) 'A methodological analysis of segregation indexes', American Sociological Review, 20 (2), 210-17.

Gray, M. & Hunter, B. (2011) 'Recent trends in Indigenous labour force status: Re-establishing employment as a social norm?', Topical Issue 2011/9, Centre for Aboriginal Economic Policy Research, Canberra, The Australian National University.

Gray, M., Hunter, B. & Lohoar, S. (2012) 'Increasing Indigenous employment rates', Closing the Gap Issues Paper No. 3, Canberra, Australian Institute of Health and Welfare and the Australian Institute of Family Studies.

Hudson, S. (2008) CDEP: Help or Hindrance? The Community Development Employment Program and its Impact on Indigenous Australians, St Leonards NSW, Centre for Independent Studies.

Hunter, B. (2009) 'A half-hearted defence of CDEP scheme', Family Matters, 81, 43-54.

Hunter, B. & Gray M. (2012a) 'Determinants of Indigenous labour supply following a period of strong economic growth', Working Paper 81, Centre for Aboriginal Economic Policy Research, Canberra, The Australian National University.

--(2012b) 'Continuity and Change in the CDEP Scheme', Working Paper 84, Centre for Aboriginal Economic Policy Research, Canberra, The Australian National University.

Miller M. (Chairman) (1985) Report on the Committee of Review of Aboriginal Employment and Training Programs, Canberra, Australian Government Publishing Service.

Pearson, N. (2007) 'Stuck on the welfare pedestal', The Australian, 10 February.

Smith, D.E. (1994) '"Working for CDEP": A case study of the Community Development Employment Projects scheme in Port Lincoln, South Australia', Discussion Paper No. 75, Centre for Aboriginal Economic Policy Research, Canberra, The Australian National University.

Spicer, I. (1997) Independent Review of the Community Development Employment Projects (CDEP) Scheme, Canberra, Office of Public Affairs, ATSIC.

Endnotes

(1.) An overview of the CDEP scheme and its history up until 2005 is provided by Altman, Gray and Levitus (2005). The changes to the CDEP scheme in the late 1980s followed a review completed in 1985 (the Miller Report 1985) and the changes in the late 1990s followed the Spicer Review (Spicer 1997).

(2.) However, from July 2009 the rules have changed so that while new CDEP participants may still engage in part-time work in addition to their CDEP commitments, their CDEP payment is reduced as earned income increases at a higher rate than was the case previously and it is now consistent with the standard income test for income support payments.

(3.) According to DEWR there were around 37,000 CDEP participants in 2005 (DEWR 2005). This number includes non-Indigenous CDEP participants. It appears that there were around 1,200 non-Indigenous participants in 2004 at the time when responsibility for CDEP was transferred from Aboriginal and Torres Strait Islander Social Services (Aboriginal and Tortes Strait Islander Commission data for June 2004). The numbers of CDEP participants reported in this paper are an estimate of the number of Indigenous participants. The estimate of the number of CDEP participants from the 1994 NATSIS and 2008 NATSISS differ from the administrative data because of the differences in method of producing the estimate (for example, social survey and administrative data).

(4.) Grandfathered CDEP participants will continue to receive CDEP payments until 2017 provided that they remain on the Remote Jobs and Communities Program.

(5.) Consistent with the decrease in number of CDEP participants since 2006 (see Figure 1) the proportion of the working age Indigenous population who are in the CDEP scheme declined between 1994 and 2008, although the fall is mostly contained to men (11.4 per cent compared with 7.1 per cent) with little change in the proportion of Indigenous women working in the CDEP scheme (4.9 per cent compared to 3.9 per cent).

(6.) Overviews of these surveys are provided in ABS (2010b, 2011).

(7.) The NATSISS 2008 and NATSIS 1994 collected data on hours worked in all jobs.

(8.) The incidence of holding multiple jobs among non-CDEP workers is only slightly higher than people employed in the CDEP scheme.

(9.) The lack of real increases in the income of CDEP participants is a consequence of the linking of government funding for CDEP organisations to income support payment rates via the 'average per participant rate'.

(10.) The only exception is non-remote areas where people have a greater number of labour market alternatives.

(11.) A further difference is that, using the 2002 data, Hunter (2009) found that CDEP participants were more likely to be living in a violent neighbourhood than were the unemployed whereas this study using the 2008 data finds no statistically significant differences between the CDEP participants and unemployed on this measure.

Table 1: Selected characteristics of CDEP jobs, 1994 and 2008

                                      1994

                   Weekly    Under-    2+ jobs    Work allows
                   hours    employed     (%)       cultural
                              (%)                 obligations
                                                 to be met (%)

Gender
Female              23.4      40.3       2.1         68.7
Male                25.4      54.1       2.8         64.9

Age
Under 35 years      24.5      52.2       3.1         66.7
Over 35 years       25.2      45.1       1.6         65.0
Remoteness

Remote              24.8      45.9       2.3         75.7
Non-remote          24.4      62.7       3.5         34.1

All CDEP workers    23.4      40.3       2.1         68.7

                                      2008

                   Weekly    Under-    2+ jobs    Work allows
                   hours    employed     (%)       cultural
                              (%)                 obligations
                                                 to be met (%)

Gender
Female              22.7      25.0      10.4         83.5
Male                24.5      40.4       6.6         82.0

Age
Under 35 years      23.4      40.1       4.5         79.1
Over 35 years       24.3      27.2      12.6         87.0
Remoteness

Remote              24.4      32.6       7.5         82.4
Non-remote          19.2      48.1      12.3         84.1

All CDEP workers    23.8      34.4       8.1         82.6

Note: Table population is Indigenous people aged 18-64 years who were
employed in the CDEP scheme. The number of CDEP workers  answering
the 2008 NATSISS questionnaire in remote areas was 450. In non-remote
areas only 32 CDEP participants identified themselves as  such in the
NATSISS data-which represented an underlying population of 1,967.
Accordingly great caution should be exercised in interpreting  the
non-remote results as they are less reliable than the remote
estimates. Standard errors, which are estimated using a bootstrap
estimator on  replicate weights, are available on request.

Source: 1994 NATSIS and 2008 NATSISS data (accessed via ABS Remote
Access Data Laboratory (RADL)).

Table 2: Personal weekly income by labour force status and
remoteness, 1994 and 2008

               CDEP      Non-CDEP    Unemployed     NILF
             (A$ 2008)   employed    (A$ 2008)    (A$ 2008)
                         (A$ 2008)

Remote
1994          358.59      697.10       231.29      228.35
              (18.41)     (22.80)      (8.91)      (8.14)
2008          363.50      845.30       208.81      263.79
              (17.14)     (37.32)     (16.02)      (10.96)
Non-remote
1994          401.10      723.99       241.13      267.37
              (36.33)     (19.01)      (8.92)      (7.61)
2008          364.03      851.73       226.64      305.07
              (35.96)     (19.55)     (12.25)      ($7.50)

Notes: The population of this table is Indigenous people aged 18-64
years. The income measure is gross (before tax) weekly personal
income.  Income from 1994 has been converted to 2008 dollars using
the Consumer Price Index (CPI). Standard errors, which are estimated
using a  bootstrap estimator on replicate weights, are reported in
parenthesis.

Source: 1994 NATSIS and 2008 NATSISS data (accessed via ABS RADL).

Table 3: Characteristics of CDEP jobs, 2008

                         Main job     Total time       Time in
                        is part of   spent in paid   current job
                         CDEP (%)     employment       (years)
                                        (years)

Gender
Female                     96.3          10.1            3.9
Male                       97.8          12.9            3.6

Remoteness
Remote                     97.7          11.9            3.9
Non-remote                 93.4          11.4            2.0

Age
Under 35 years of age      98.5           6.5            2.6
Over 35 years of age       95.6          18.5            5.1

All CDEP                   97.2          11.8            3.7

                        Considers it     On CDEP
                        a permanent     for over
                          job (96)     2 years (%)

Gender
Female                      68.2          56.9
Male                        63.8          60.2

Remoteness
Remote                      68.7          61.3
Non-remote                  41.6          42.0

Age
Under 35 years of age       57.3          52.5
Over 35 years of age        75.9          67.3

All CDEP                    65.5          58.9

Notes: The population of this table is Indigenous people aged 18-64
years. Standard errors, which are estimated using a bootstrap
estimator  on replicate weights, are available on request. Standard
errors are not reported here to save space, but the inferences in the
text are based on  them.

Source: 2008 NATSISS data (accessed via ABS RADL).

Table 4: Distribution of occupation by CDEP status and gender, 2008

                                          CDEP (%)         Non-CDEP
                                                         employed (%)

Occupation in main job                 Female   Male    Female   Male

Managers                                3.5      4.0     5.5      5.6

Professionals                           16.9     6.5     17.4    10.8

Technicians and Trades Workers          6.0     22.8     3.1     20.9

Community and Personal Service          21.1     7.8     27.1    10.9
Workers

Clerical and Administrative Workers     12.9     2.5     22.3     5.4

Sales Workers                           5.8      0.1     8.7      3.3

Machinery Operators And Drivers         1-4      6.0     2.1     18.6

Labourers                               32.3    50.4     13.9    24.6

Total                                  100.0    100.0   100.0    100.0

Segregation between Indigenous and     0.338    0.419   0.204    0.262
non-Indigenous occupations

Note: The table population is 18-64 year old employed indigenous
males and females. Segregation indexes are the standard dissimilarity
indexes (Duncan & Duncan 1955).

Occupation classification is based on the Australian and New Zealand
Standard Classification of Occupations (ANZSCO.

Source: Indigenous data from 2008 NATSISS data (accessed via ABS
RADL). Non-Indigenous occupations based on 2006 Census data (see
Hunter & Gray 2012a). Segregation indexes based on author
calculations.

Table 5: Community development and related characteristics by labour
force status and  gender, remote areas 2008

                                 Non-CDEP   CDEP    Unemployed   NILF
                                 employed    (%)       (%)        (%)
                                   (%)

Females

Speaks an Indigenous language      38.6     72.2       49.7      52.5

                                  (3.4)     (6.8)     (6.4)      (3.3)

Lives on traditional country       37.6     62.7       43.0      44.8
(homelands)
                                  (3.1)     (6.4)     (6.9)      (3.2)

Non-market production              56.2     81.6       63.9      61.5
(hunting and gathering)
                                  (3.6)     (3.8)     (6.0)      (3.0)

Felt discriminated against in      32.5     22.0       37.6      23.1
the previous 12 months
                                  (3.0)     (4.0)     (6.0)      (2.6)

Felt discriminated against in      8.0       3.6       22.3       1.8
the previous 12 months
because of work                   (1.4)     (1.9)     (4.6)      (0.6)

Little or no say within            38.6     43.0       51.5      55.0
community on important issues
                                  (3.1)     (4.6)     (6.5)      (2.7)

Males

Speaks an Indigenous language      41.3     72.0       56.1      60.1

                                  (4.4)     (4.9)     (6.1)      (4-1)

Lives on traditional country       35.9     53.8       42.0      50.2
(homelands)
                                  (3.8)     (5.3)     (4.7)      (5.2)

Non-market production              75.5     85.9       82.3      70.0
(hunting and gathering)
                                  (3.4)     (2.7)     (4.9)      (3.9)

Felt discriminated against in      30.4     28.5       35.6      20.2
the previous 12 months
                                  (3.4)     (3.8)     (5.9)      (2.8)

Felt discriminated against in      9.2       8.8       17.4       2.3
the previous 12 months
because of work                   (1.9)     (2.4)     (4.7)      (1.5)

Little or no say within            38.4     35.7       55.5      52.6
community on important issues
                                  (3.2)     (4.0)     (6.1)      (38)

Notes: The population of this table is Indigenous females and males
aged 18-64 years. Standard errors, reported in brackets, are
estimated  using a bootstrap estimator on replicate weights.

Source: 2008 NATSISS data (accessed via ABS RADL).

Table 6: Marginal effect of CDEP and other labour force categories on
selected social  and economic outcomes, 2008

                        Marginal effect (difference from unemployed)

                        CDEP (%)    Non-CDEP    NILF (%)      Base
                                    employed               probability
                                       (%)                     for
                                                           unemployed
                                                               (%)

Arrested                 -5.8 **    13.1 ***    -5.6 ***      21.1
Violent neighbourhood      3.7      -6.1 ***    -7.2 ***      40.0
Victim of crime           5.5 *      -6.9 **      -2.3        29.0
Financial Stress         -6.3 *     -25.1 ***     1.0         59.5
Low household income    -26.6 ***   -56.0 ***    -4.8 *       65.5
Disability                 0.4       -1.8 **    7.9 ***        5.1
Fair or poor health      -6.8 **    -12.0 ***   8.5 ***       25.0
Studying                   1.9       5.1 ***      0.8          7.4

Note: The asterisks indicate statistically significant differences in
the outcome variable for each labour force state compared to the
unemployed. *** indicates a difference at 1 per cent level, ** a
difference at the 5 per cent level and * a difference at the 10 per
cent level.

Source: Calculated using multivariate regression results reported in
full in Hunter and Gray (2012b).
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Publication:Australian Journal of Social Issues
Article Type:Report
Geographic Code:8AUST
Date:Sep 22, 2013
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