The effects of the CDEP scheme on the economic status of Indigenous Australians: Some analyses using the 1996 Census

Author/editor: Altman, JC, Gray, MC
Year published: 2000
Issue no.: 195

Abstract

The Community Development Employment Projects (CDEP) scheme is currently the Aboriginal and Torres Strait Islander Commission's (ATSIC's) most significant program. Since its establishment in 1977, this Indigenous-specific program has been variously described as a labour market program, an alternative income support scheme and a community development initiative. A major objective of the scheme is to improve the employment and income status of Indigenous people.

This paper presents the first analysis using data from the 1996 Census of the effects of CDEP employment on the economic status of Indigenous individuals. The 1996 Census is the first census that provides information about CDEP employees. Information is restricted to areas in which the Special Indigenous Personal Forms (SIPF) were utilised, but this allows the effects of CDEP employment on income to be better isolated, at least in these areas. Some comparisons of the labour market outcomes of Indigenous people in CDEP communities to those in non-CDEP communities are also presented.

Previous CAEPR research and data availability

A number of papers have analysed the effects of CDEP participation on the economic status of individuals and communities. These papers have produced mixed results that may have been generated in part by the absence of appropriate statistical information about the effectiveness of the scheme. On balance, the available evidence suggests that the CDEP-employed earned higher incomes than those dependent on government support, and significantly lower incomes than those in mainstream employment.

The 1996 Census and the identification of CDEP employment

Statistical data on CDEP scheme participants have improved in the last decade, but the information available in the 1996 Census that is analysed here is still incomplete. For the first time, the 1996 Census attempted to reliably identify CDEP-employed participants in the discrete Indigenous communities in which the SIPF were used as part of the Indigenous Enumeration Strategy (IES). The SIPF were predominantly used in remote and rural communities, as well as in some town camps, and are based on data collection via interview rather than self-administered questionnaire.

  • The total number of CDEP participants identified as employed in the 1996 Census was 12,256, which constitutes around 65 per cent of estimated working CDEP participants at the time.
  • The geographic areas in which the SIPF was used have relatively large Indigenous populations. The Indigenous population enumerated in the SIPF areas is approximately 20 per cent of the total Indigenous population, whereas the non-Indigenous population is 0.6 per cent of the total non-Indigenous population. Despite having only 20 per cent of the Australian Indigenous population, approximately 60 per cent of total CDEP employment is in the SIPF areas.
  • The Indigenous employment to population ratio of 40.5 per cent in the SIPF areas is slightly higher than the employment to population ratio of 38.5 in the non-SIPF rest of Australia, primarily because of the high levels of CDEP 'employment' in these areas. Reflecting the lack of mainstream employment opportunities in the SIPF areas, the labour force participation rate and median incomes are lower in the communities in which the SIPF was used than for the Indigenous population in the rest of Australia.

The effects of the CDEP scheme on labour market outcomes

This section focuses specifically on those areas in which the SIPF was used in order to allow an analysis of the effects of CDEP employment on income. By using information at the level of the individual it is possible to isolate the effect of CDEP employment on income.

  • The mean and median personal weekly income of the CDEP-employed is substantially higher than for the unemployed. For example CDEP-employed males and females receive a median income of $169 and $166 per week respectively, compared to $146 and $154 received by unemployed males and females respectively. The income of the CDEP employed is, however, much lower than the median income of $274 per week received by both Indigenous males and females in full-time and part-time mainstream employment in SIPF areas.
  • Participation in a CDEP scheme may increase personal income in several ways. CDEP participants may combine CDEP employment with part-time mainstream employment, or periods of CDEP employment with periods of mainstream employment and self-employment within a given year. Community organisations with CDEP schemes may also engage in business enterprises that generate extra hours of paid employment for CDEP participants. In addition, if there are drop-outs from the CDEP scheme, it is possible to provide more days of work (and hence income) for those who take on the work of the departed participants.
  • The distribution of hours worked per week for the CDEP and mainstream-employed reveals that a significant minority of working CDEP participants worked full-time (more than 35 hours per week)

The effect of CDEP schemes on the economic status of Indigenous communities

This section analyses the effects of the CDEP scheme on the extent of employment and unemployment at the level of Indigenous communities and groups. By combining ATSIC administrative data with census data it is possible to compare the rates of employment, labour force participation and unemployment in the CDEP communities with those in non-CDEP communities. The analysis here includes all communities in rural and remote areas and other urban areas. It is not possible to conduct an analysis of CDEP and non-CDEP communities in major urban areas.

The comparative economic status of CDEP and non-CDEP communities by section-of-State

  • CDEP communities in 'other urban' areas have an employment to working age population ratio of 39.0 per cent which is very similar to the rate of 39.9 per cent in non-CDEP communities. CDEP schemes account for 6.0 per cent of employment, and therefore this suggests a mainstream employment rate of around 33 per cent in 'other urban' areas in which there are CDEP schemes. Thus, in the absence of the CDEP scheme, the employment to population ratio would be lower than in other urban areas which do not have CDEP schemes.
  • The most dramatic effects of CDEP schemes on employment can be seen in the 'rural balance and locality' areas. CDEP communities in these areas have an employment to population ratio of 49.7 per cent which is more than 10 percentage points higher than in CDEP communities in 'other urban' areas. On the other hand, communities without the CDEP scheme in 'rural balance and locality' areas have an employment to population ratio of 37.7 per cent which is slightly lower than in 'other urban' areas.

The proportion of the population which is non-Indigenous and CDEP employment

The proportion of the population in a geographic area which is non-Indigenous is closely related to the number of mainstream labour market opportunities. Indigenous locations in which a high proportion of the population is non-Indigenous have higher mainstream labour market opportunities in general. CDEP employment accounts for the greatest proportion of employment in regions in which a large proportion of the population is Indigenous. This result simply reflects the fact that there are more CDEP schemes in areas in which a high proportion of the population is Indigenous, because of past administrative rules which limited CDEP schemes to rural and remote areas. This pattern is likely to change in the future with policy shift allowing more CDEP schemes in urban areas.

Conclusion and policy implications

This paper finds that CDEP employment increases income above social security entitlements, but that the increase in income is smaller than NATSIS estimates show. This suggests that CDEP employment does play some role in raising personal incomes. There are a number of possible reasons for the difference between the NATSIS estimates and those presented here. One possibility is that the NATSIS findings are representative of the entire Indigenous population, whereas the 1996 Census estimates are restricted to geographic regions in which the SIPF was used: that is predominantly rural and remote areas in which mainstream employment opportunities are limited.

CDEP-employed in urban areas may receive more than those in rural and remote areas because CDEP schemes in urban areas may be more likely to engage in activities which provide CDEP participants with increased hours of work. However, it is very possible that not all cash income earned in rural and remote areas is enumerated, especially that gained from informal economic activity.

If the difference between the NATSIS and the 1996 Census estimates of the effects of CDEP on income is due to the fact that the NATSIS estimates are for all regions of Australia, whereas the census estimates are primarily for rural and remote areas, then this implies that the positive effect of CDEP on income is much larger in the urban areas than in the rural and remote areas.

Ultimately, the socioeconomic impact of the scheme on individuals is significant and future census and NATSIS information on scheme participants will be important. But the scheme has two broad aims: labour market performance and community development. Broader questions such as whether there are significant differences in the social and cultural characteristics between communities with and without CDEP cannot be addressed using census data. Data sets which measure a far wider range of variables such as health status, arrest rates, and the flows between CDEP employment and the other labour force states are all needed to answer such questions. It is likely that such issues will only be comprehensively addressed by community-based case-study research that can document the benefits of the scheme to community development outcomes.

ISBN: 0 7315 2630 9

ISSN:1036 1774

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