Report to the Senior Advisory Stakeholder Committee

2as of March 31,1994

Both the CRPIS and the CLAND sample diverge from the DND civilian workforce in their age composition. Younger workers (those below 44 years of age) are under-represented whereas employees over 55 years of age are significantly over-represented relative to their presence in the DND civilian workforce.

No significant variation across waves is noted in the composition of the sample with the exception of a slight shift in the distribution across age bands. This is partially attributable to the ageing of the sample as well as the greater mobility and attrition among younger participants.

How the Survey was Administered

All interviews were conducted by Ekos Research Associates under contract to the Union of National Defence Employees. The data collection techniques described fully in the Wave One report have been maintained.

The original research design schedule called for each wave of data collection to be completed over a period of approximately nine months. The difficulties initially encountered in generating an adequate sampling frame for Wave One, however, have resulted in sampling periods for each wave that are effectively double in length. The total period for the Wave Three data collection extended from September 1996 to July 1998.

Table 3 below illustrates the average duration between the date of offer and the first three waves of interviews for each cohort. Overall the average point of contact was 670 days (roughly 22 months) from time of offer.

Table 3: Average Distance Between Interview Date and Date of CRP Offer (in days)

Findings

The CRP Decision

The study’s population is civilian employees of National Defence who received a letter-of-offer between September 1994 and August 1996. The decision to sample on the basis of the receipt of a departure incentive offer allows the project to track the outcomes of two groups: employees who accepted the CRP (or its subsequent replacement ERI/EDI) as well as those employees who declined.

As indicated in previous reports, approximately three-quarters of respondents opted to accept the buyout offer, while the remainder declined either a group offer or a directed offer. The basic distribution along CRP type is consistent across the three series of interviews. Despite the acceptance of the departure incentive by a large majority of respondents, particularly in Cohort 2 where take-up exceeded 95%, analysis of CRP decision type did reveal some interesting distinctions. Compared to CRP takers, individuals electing to remain departmental employees were more likely to be found in the mid-range of the age categories (between 35 and 54) and located within the Technical occupational grouping. Regionally, acceptance rates declined steadily from east to west with Atlantic Canada reporting a high of 84% versus a low of 65% among residents of the Pacific region.

Further examination of CRP decision type also demonstrated a significant association with two psychological constructs: locus of control and anxiety. Decliners were characterized by higher levels of anxiety and lower scores on a scale measuring locus of control - the extent to which people attribute responsibility for outcomes to internal factors.

The questionnaire contains two items developed to gauge individuals’ comfort with their decision. One probed their level of satisfaction with having made the "right" decision while the second measured their propensity to repeat their decision given the opportunity. These questions were combined into a single measure of CRP decision satisfaction. Almost two years from the event, most people maintained a high degree of satisfaction with their decision; the average score reported was 5.7 out of a possible seven.

As expected, individuals’ current work situation was strongly related to their appraisal of the departure decision; retirees reported the greatest degree of satisfaction whereas the unemployed in the sample reported the least. Among the other factors associated with the extent of satisfaction respondents felt towards that decision were three psychological measures: anxiety, depression, and locus of control. Individuals reporting high levels of social support were also most comfortable with their decision.

CRP Decliners at 21 Months

The acceleration of large-scale downsizing across corporate North America during the last fifteen years has caused organizations to focus increased attention on the impacts experienced by the "survivors" - those who remain as employees after the restructuring. This section of the report provides an update on the circumstances of the "survivor" segment (those who declined the incentive offer) of our sample at 21 months from the time of offer. The survivor subset represents 23 percent of the overall sample (weighted) and includes 331 cases: 233 who declined group offers and 98 who rejected directed offers.

Where They Are

Twenty-one months following their receipt of a CRP offer, just under half of the remaining employees (48.7%) remained in their same position. As expected, most of the stability is attributed to employees who received group offers – less than fifteen percent of the directed-offer decliners were still found in their surplus positions.

For both group- and directed-offer decliners, mobility within the federal public service is mostly confined to the Department of National Defence. Less than eight percent of job changers found positions in a different department.

The Survivors’ View

Another set of questions related to the quality of the work environment in the aftermath of organizational downsizing. Remaining employees were asked about their levels of morale, workload, and commitment to their work. Respondents continue to report a high degree of commitment to their work despite significantly lower levels of morale and substantial increases in workload. This basic pattern has remained consistent across the three waves.

Leadership within National Defence has been the subject of considerable public scrutiny over its handling of a myriad of military and administrative issues over the past five years. Employees were queried regarding their assessment of the trustworthiness and commitment of senior management. In general, employees were fairly critical on these two key dimensions of leadership. Consistent with the Wave Two results, employees reported a low level of trust in senior management and a poor rating of management’s commitment towards the workforce. The only variation centers on the basis of gender: male employees tended to express more harsh views of senior management than did their female counterparts.

Surviving employees also continue to harshly rate the impact of the downsizing on the work environment in National Defence. Almost three-quarters of employees (72%) identified an overall negative impact as a result of the reductions.

Three items measuring aspects of employee job satisfaction (satisfaction with pay, satisfaction with benefits, and an overall measure) were first introduced into the study at the time of the Wave Two survey. On 7-point rating scales where seven signifies being "extremely satisfied", employees reported moderate levels of satisfaction (4.9) with both non-salary benefits and overall job satisfaction at the 21-month interval. Satisfaction with salary compensation, however, scored much lower (3.8). While the first two measures were also stable across time, a small but statistically significant decline occurs in respondents’ satisfaction with salary from the Wave Two level. The extension of a legislated wage freeze across the federal public service is likely to have contributed to this drop.

CRP Takers at 21-months

The Civilian Reduction Program encouraged a large proportion of eligible National Defence employees to voluntarily separate from the federal public service. As mentioned earlier, amendments to the WFA Directive also severely compromised employees’ alternatives to departure by eliminating the guarantee of a reasonable job offer.

This section of the report documents the circumstances of CRP recipients at twenty-one months from the time they were initially offered the buyout package. At this interval, all respondents who accepted a buyout package had formally departed National Defence.

Training Activities

The CRP included a training/education allowance which provided for a maximum of up to $7,000 over four years for retraining towards employment outside the federal public service. The training option has been liberally interpreted to apply towards a broad variety of training activities. The CLAND questionnaire contained ten questions dedicated to the utilization of the CRP training allowance, focusing on training receipt, type, duration, and progress. The cumulative survey results produced at Wave Three confirm the ongoing popularity of the training allowance among CRP recipients.

Of those employees who accepted the CRP and had not withdrawn from the labour force, 65 percent have received training funded under this provision. As described in the previous reports, interest in training declines with age and increases with educational attainment. At 21 months from time of offer, 42 percent report having completed their program of study while 55 percent of individuals indicated that their training was still in progress.

Instruction in computers remained by far the most common training area. Almost half of all respondents who received CRP-funded training pursued instruction in desktop or personal computers. A disparate range of subject areas accounted for the remaining balance: management/administration (8.9%), vocational (7.4%), health sciences (6.5%) and engineering/technology (6.0%).

To ascertain the source of training delivery, a question was inserted into the Wave Three instrument. Fourty percent of individuals participating in training at the 21-month interval identify a private institution as their training provider. Community colleges accounted for 35 percent followed by universities (13%) and professional associations (6%).

The duration and intensity of the training programs tended to be highly variable as indicated by the high standard deviations associated with the means for both course length and hours per week. The average amount of time spent per week in training was 16.6 hours (s.d.=14.2) while the total course length averaged 25 weeks (s.d.=25.7). Training also appears to be largely a part-time pursuit: less than 30 percent of respondents were enrolled in training involving more than twenty hours per week. Training recipients also reflected positively on the usefulness of their learning experiences. On a scale ranging from 1 "not at all useful" to 7 "extremely useful", an average score of 5.5 was reported.

The ability to apply a portion of the $7000 allowance towards the purchase of tools and equipment proved to be a preferred aspect of the program; two-thirds reported making such investments. Information from Departmental training officials indicates that computer equipment was the most popular type of purchase noted.

Employment Status

To determine the labour market outcomes of employees departing National Defence, the CLAND study identifies and tracks detailed characteristics of individuals’ subsequent employment experience. Recognizing that displacement from stable employment in the 1990s generally results in increased economic insecurity marked by multiple jobs and sequential employers, the questionnaire is designed to capture information from multiple jobs.

For both first job since departing DND and current job, employees were questioned about their date of hiring, source of information leading to hiring, type of work, industry, unionization, employment status, earnings, and job satisfaction. A series of questions were also asked of individuals declaring retirement, primarily focusing on the timing of their exit and the appearance of any subsequent labour force participation.

An examination of labour market outcomes at the 21-month interval reveals the relatively modest integration of departing DND employees into the external labour force. As shown in Figure 5, only 12 percent of respondents who left indeterminate positions at National Defence have secured full-time employment (including contract employment). Smaller numbers have turned towards self-employment (9.0%) and part-time work (6.8%). More striking is the extent to which the National Defence departure program appears to have operated primarily as an early retirement vehicle for civilian employees. Retirement stands as the largest single disposition: 40 percent of sample respondents who left National Defence under the CRP identify it as their current employment state.

Almost two years from the point at which they received their departure offer, fully one-quarter of the former DND civilian employees are without work. Although some of those reporting to be unemployed at the time of the Wave Three interview had post-departure work experience, over half of the unemployed have been without work since receiving the CRP.

Several factors were associated with employment outcomes. Specific groups of workers were more likely to experience joblessness following their departure from DND. Unemployment was highest among individuals in the lowest income bracket (under $25,000), those coming from the Operational and Administrative Support categories, and respondents from Atlantic Canada. Another variable that has a significant impact on employment outcomes was age; unemployment was highest among individuals found in the middle age categories (35-44 and 45-54 years of age) - roughly twice the level experienced by those under 35 years of age. Interestingly, the receipt of training did not significantly increase the likelihood of being employed at Wave Three.

Table 4: Labour Market Outcomes by Age

A new set of questions exploring individuals’ utilization of the Employment Insurance (EI) program were introduced in the Wave Three survey (retirees were excluded from this series of questions). EI regulations prohibit individuals from receiving benefits during a period for which they receive a severance payment. At twenty-one months from time of offer, most CRP takers unsuccessful in finding work would have exhausted their severance period and become eligible to receive EI benefits. Evidence of departing DND employees turning to the social safety net for assistance is supported by the data. Sixty percent of non-retiring CRP takers (n=672) had applied for EI since leaving National Defence. Of those who applied, 42 percent were receiving unemployment insurance at the time of the Wave Three interview. Characteristics of EI recipients mirror the general profile of the unemployed in the sample; it was highest among women, individuals between 35 and 54, and those possessing low skill portability. The largest reason cited for not applying for EI was perceived ineligibility to receive benefits.

In addition to youth, characteristics related to individuals’ human capital were significantly associated with securing work. Enhanced rates of employment were noted by those with educational achievement at or beyond the post-secondary level and individuals from the Scientific/Professional category. CRP takers who felt their skill set was highly portable were twice as likely to be employed than were individuals assessing their skill portability as poor.

The large transition into retirement is consistent with the age profile of the sample. Slightly over half of sample respondents were 50 years of age or older at the time they were offered the CRP and the take-up rate was extremely high (91.6%) among individuals in the "over 55" age category. Various socio-economic factors were also associated with retirement. A higher incidence of retirement is noted among high-income earners, workers in the Technical and Administrative/Foreign Service categories, those lacking a high school diploma, and among ex-military personnel.

As was reported in the Wave One report, approximately 80 percent of retirees indicated that the program encouraged them to retire earlier than they had planned. Despite the high numbers of employees moving into retirement ahead of their personal schedules, very few report any employment activity, part-time or otherwise, following their departure from National Defence. The proportion of retirees claiming engagement in paid employment or operating their own businesses has remained consistently around the five percent range across the three waves.

Current Job

Individuals employed at Wave Three are grouped into three principal types of employment relationships. Traditional wage employment (either full- or part-time) is cited by 40 percent of the sample, followed by 34 percent claiming self-employment and 26 percent engaged in contract work.

Despite the slight growth in the proportion of employed workers at the Wave Three interval, little changed in the characteristics of "current job" from what was initially reported at Wave Two. The nature of employment continues to be diverse. The most common types of self-employment activities were in retail and a broad "service industry" category, each accounting for approximately 15 percent of the total, followed by construction (11.5%). Individuals engaged in paid employment, either full-time or part-time, were also broadly dispersed across a spectrum of industries with the "service" category capturing just over a quarter of the group.

Most self-employment initiatives, approximately 80 percent, consist of small, home-based or mobile operations featuring the respondent as the sole employee. A closer examination of the self-employed workforce produced few significant findings. Gender demonstrated a statistical association with males revealing a moderately stronger inclination towards self-employment than did females. Older workers and those with previous military experiences were also more likely to report self-employment.

Among those engaged in salaried or contract employment, personal contacts proved to be the most reliable means of landing a job, identified by 45 percent of working respondents. Direct contact with employers contributed to 22 percent of hirings followed by responding to newspapers ads (17%). Only four percent identified the Canada Employment Centre as the source of information that led to their employment.

The work week for respondents, including the self-employed averaged 33.7 hours, although the median was higher at 38 hours per week. Over half of the respondents indicated a preference for their current allocation of hours, while 24 percent stated they would like to work more (down from 32 percent seeking additional hours at Wave Two). Wages averaged $505 per week, considerably less than the mean wage of $710 reported by those who declined the CRP and remain employees of National Defence. There were no significant differences in weekly earnings based on type of employment.

Another feature of the post-departure labour force participation is the loss of union affiliation. Whereas 95 percent of the sample was covered by a collective agreement in the public service, only 22 percent of those moving into wage or contract employment are unionized.

Individuals’ assessment of their current job were derived from three questions related to job satisfaction. Respondents were asked to comment on their satisfaction with salary and non-salary benefits, as well as an overall rating. As the comparison in Table 5 demonstrates, CRP recipients who are now working tend to evaluate their new positions more favorably despite equal or poorer ratings on two specific components of job satisfaction. This pattern, which is unchanged from Wave Two, would seem to suggest either a bias towards more favorable assessments of current situations to justify their decision to leave or an indication that characteristics other than salary and benefits (such as working conditions, organizational climate, and management styles) contribute more to an overall measure of job satisfaction.

Table 5: Comparison of CRP Takers’ Satisfaction in Current versus DND Job

Analysis of the satisfaction variables generated few significant associations. As expected individuals in traditional wage employment report the highest level of satisfaction with non-salary benefits. This is related to the general lack of benefits available to the self-employed and contract workers. Skill portability was positively associated with individuals’ satisfaction overall and in the area of salary. Interesting relationships noted between employment type and certain psychological indicators paint an unpleasant portrait of contract employees; they reported the lowest scores on happiness and locus of control, together with the highest degree of anxiety.

Economic Conditions

Although there is evidence that some workers experience earnings gains following involuntary departure (Ruhm,1991; Lauzon,1995), a greater body of literature supports the argument that displacement generally results in income decline extending over a considerable period of time (Jacobson et al, 1993,1993a; Hamermesh, 1989; Ontario Ministry of Labour,1993; Grayson,1985; Ruhm,1992). Given this literature, we expect that individuals accepting the CRP would experience economic decline over the long-term, notwithstanding the short-term benefits of the generous buyout terms.

The questionnaire contained a series of questions designed to track changing economic circumstances of the full sample. In addition to a three-item scale of economic condition, individuals were asked about personal saving levels, any requirement to cut back on important expenditures, and the burden of basic housing expenses.

A general worsening of economic circumstances is reported by approximately half the sample respondents. In particular, individuals report the greatest decline in their ability to generate and maintain savings. Nonetheless, two-thirds report no requirement to cut back on expenditures.

A key finding of the previous CLAND reports was the clear gulf in perceptions of economic condition between CRP recipients and those who declined the offer. At the 21-month interval, CRP takers remain significantly more likely to identify economic improvement. The economic honeymoon enjoyed by CRP recipients continues to provide a contrast to the decline cited among the "survivor" group choosing to remain Departmental employees. The latter group is still almost three times as likely to report a decline in economic conditions than to have indicated an improvement in this area.

Among CRP takers, 41percent of employed respondents report improved economic circumstances followed by 29 percent of both retirees and the unemployed. The gulf between CRP takers and survivors is highlighted by the finding that the low level of economic improvement (22%) reported by employees remaining at National Defence trails even that of the unemployed.

Individuals’ social integration appears linked to their assessment of economic circumstances. Increased levels of social and spousal support were associated with an increased likelihood of reporting an improved economic position. Psychological well-being also plays a role. Individuals with elevated depression, stress, and fear of job loss are less likely to report an improvement in economic circumstances as are those with a lower sense of an internal locus of control.

Another measure associated with individuals’ perception of their economic environment was an item that gauged employed respondents’ sense of job security, specifically the likelihood of losing their job over the next few years. Roughly sixty percent of respondents expressed an expectation that job loss could be encountered in the relative near-term. Three-quarters of National Defence employees in the sample indicated a high likelihood of layoff in comparison to 44 percent of employed CRP recipients. Younger workers (under 35 years of age) were the least anxious as were employees drawn originally from the Administrative Support category and individuals possessing a strong internal locus of control.

Psychological Measures

Although unemployment often results from "economic down turns" and "structural corrections in the market", the impact is usually felt at a personal or psychological level. Unemployment and job loss are known risk factors for poor mental health (Kessler et al., 1987; Liem & Liem 1988; Weissman et al., 1991), most often manifested in the form of depression and anxiety. The CLAND questionnaire included questions directly related to these problems. To track possible changes in symptom levels over time, Wave One questions were re-asked at the second and third interview occasions. At each wave, depression was measured using a twelve-item scale, drawn from the General Health Questionnaire (GHQ) and augmented with four additional questions. Anxiety was measured by a condensed seven-item version of Spielberger's 1979 State Trait Personality Inventory. In each measure, lower scores indicate reduced levels of depression and anxiety.

Despite mental health concerns associated with unemployment, respondents at Wave Three continued to report relatively low overall levels of depression and anxiety, averaging 2.0 and 2.6 on a seven-point scale. Wave Three results also show that only 6% of respondents are at risk of depression and 5% are at risk of anxiety severe enough to impair daily activities. These figures compare favorably with general population estimates which indicate 5% to 7% of adults suffer from debilitating depression and approximately 6% to 9% suffer from severe anxiety at any point in time.

Subgroup analyses show that the average levels of depression and anxiety experienced differ by types of marital arrangements. Married and widowed individuals reported lower levels of anxiety than single persons, while single and divorced individuals experienced higher levels of depression than all other partner arrangements. Results for depression and anxiety by employment status indicate that unemployed individuals at Wave Three had significantly higher depression levels than their employed counterparts. Those employed outside DND reported the lowest anxiety levels, compared to those employed at DND, and those who retired.

Qualitative information gained from the focus groups support this finding. A number of participants maintained that their spouse’s departure from DND and subsequent unemployment had directly contributed to depression and marital problems. One participant put it this way:

As soon as that depression sets in they start picking on you. I have to admit, I haven’t fought as much with my wife as I have since she lost her job. We never really fought before, but we’ve had some pretty good ones, last year in particular.

Others participants expressed similar difficulty dealing with their spouses’ depression. In another person’s words:

She would not even get out of bed. I had to encourage her to get up and take a shower. After a while you start feeling pretty down yourself. You start picking up her attitude. It was bringing me down. She would blow-up at me because I was forcing her to get up and try to eat and motivate her again. You feel like you should have done something to prevent this and you feel the blame cast on you.

Income and age also influences depression and anxiety levels. Participants with the lowest household income reported the highest depression and anxiety levels, while middle-aged individuals (45 to 54 years) reported the highest depression and anxiety compared to their more senior (55 years and older) and younger age mates.

Like unemployment, quantitative findings for income are further substantiated by qualitative information from spouses who attended the focus group session. Many indicated that financial instability had caused their partners to become depressed, and in a number of cases this depression had led to increased use of alcohol. Other spouses reported that their partner’s job loss and precarious financial situation had created great psychological suffering. As one focus group member put it:

…leaving really affected her [mental] health, so she did some volunteer work at the school. She got really depressed, she lost hope.

In addition to the mental health measures, the CLAND questionnaire included several psychological constructs thought to influence adjustment outcomes. As with depression and anxiety, these measures were asked across all three interview occasions. At each wave, scales were constructed to measure the level of respondent's locus of control, self-esteem, happiness, and work aspirations.

Leaving an established employment situation can be unsettling, whether the change involves a new job, unemployment, or even retirement. An individual’s belief in personal efficacy often influences his/her ability to successfully manage these life changes. Locus of control is a measure that determines the degree to which individuals believe they have influence over events or outcomes. High scores on the locus of control scale reflect a belief that one has command over events, while a low score suggests a belief that circumstances are generally outside of one's control. Respondents at Wave Three reported an average locus of control score of 4.5 on a seven-point scale, which remained virtually unchanged from Wave Two.

Analysis across selected subgroups at Wave Three suggests many patterns that parallel those seen in Wave Two. For example, college and university graduates reported feeling more control than those who lacked a university degree. Workers under 35 years of age report a significantly higher degree of control than older workers.

Individuals employed outside DND recorded substantially higher locus of control scores than respondents employed at DND, unemployed or retired individuals. Data also indicated that CRP takers felt greater control than decliners. Third interview data showed that personal and household income significantly influences locus of control in that individuals with higher incomes generally reported higher locus of control.

Self-esteem at Wave Three continued to be high amongst participants, averaging 6.0 on a seven-point scale. This score is virtually unchanged from Wave Two. As noted at Waves One and Two, those employed outside DND reported significantly higher levels of self-esteem than workers at DND, the unemployed, or retirees. Also consistent with Wave Two, the most recent data revealed no significant differences of self-esteem across categories of age, gender, education, region, or CRP type. In contrast to Waves One and Two, widowed individuals at Wave Three showed lower average self-esteem scores than other single or married participants. Moreover, Wave Three results indicate a statistically significant increase in average level of self-esteem with increasing levels of personal income. However, self-esteem scores only increase until the fifty-five thousand dollar mark where they tend to flatten off, suggesting that additional increments of income have little overall effect on increasing self-esteem.

While overall self-esteem amongst study respondents was high, spouses who participated in the focus groups provided a slightly different perspective, especially those who felt financially burdened. A number of focus group members indicated that loss of income had directly affected their spouse’s state of mind, especially their self-esteem. As one member stated: "…my wife’s self-esteem has plummeted and now it’s affecting her health." Moreover, some of the focus group members felt that their own self-esteem had started to suffer as a result of pressure to compensate for their spouse’s loss of income: "...we have to worry about money and sometimes I feel like I’m not being a good provider".

Study participants at Wave Three reported being very happy, averaging 5.8 on a seven-point scale. Married individuals at the third interview where happier than singletons, while the youngest and oldest respondents were happier than middle-aged participants. Like the previous wave, the 21-month survey indicated that those working outside DND were significantly happier than the unemployed, those employed at DND and retirees. Women reported being happier than men and participants with the lowest personal and household incomes were the least happy. In contrast to Wave two findings, region showed no statistically significant influence on respondent happiness.

The survey’s work aspiration measure is designed to tap into the extent to which one receives personal fulfillment and challenge through their daily work activities. Consistent with the previous results, participants at Wave Three report that they derive a significant level of satisfaction from their work, averaging 6.0 on a seven-point scale. More fine-grained analysis at Wave Three indicates that individuals employed outside DND reported higher levels than the unemployed and those working at DND. The 21-month data also show that women have slightly higher levels of aspiration than men, a pattern seen with Wave One and Two data as well.

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Health Impacts

The impact of displacement on individual well-being has been extensively documented. Brenner's aggregate studies first linked unemployment to increased morbidity and mortality rates (Brenner, 1973; 1979; 1983). Studies at the individual level of analysis corroborate these aggregate findings (Hepworth, 1980; D'arcy & Siddique, 1985) and longitudinal research has charted the long-term health consequences of displaced workers (Cobb & Kasl, 1979; Grayson, 1985, Liem & Rayman, 1982). Research has also examined the relationship between ill health and early retirement (Yelin et. al. 1999).

Given the association between job loss and declining health, the CLAND study incorporated a series of questions to assess respondent's own health, as well as the health of their spouse and dependents. Study participants were also asked about the frequency of visits to physicians and mental health workers, and their use of prescription drugs.

At the 21-month interview, respondents’ ratings of their own health remained positive, averaging 5.6 on a seven-point scale. Perceptions of spousal health were identical, while dependents' health was rated as being somewhat better (6.3). Although the majority of respondents (58.2%) reported no prescription drug use, several variations across selected subgroups were noted. In addition to the anticipated low rates of prescription drug use among males and younger respondents, CRP decliners also reported lower levels. In contrast, prescription drug use was highest amongst those from the Administrative Support and Administrative/Foreign Service categories, those with less than high-school education, low income earners, and both retired and unemployed individuals.

Visits to health professionals serve as another indicator of health status. Frequent visits to a doctor often signal a problem in either mental or physical well-being. Participants in the CLAND study reported a median average of one visit to a health professional over the preceding 6-month period. Contact occurrence was significantly lower for participants living in Quebec, males, individuals with higher personal incomes, greater locus of control , and those satisfied with their CRP decision. Unemployed respondents reported the highest levels of contact with health professionals, surpassing even retirees on that measure.

The importance of gender and age in health behaviors was apparent for several demographic characteristics at Wave Two. In the case of prescription drug use, after controlling for gender, association continues for age, education, CRP type, and personal income variables. For other variables, interaction effects are noted: among males, those with lower household incomes used medication most often, as did those who were either unemployed or retired.

Age controls produced a few interesting differences between subgroups of primarily older workers. Among participants over 45 years of age, prescription drug use was significantly more common among CRP takers than decliners. Occupational differences were also apparent among workers in the 45+ age band: Administrative Support workers reported elevated levels of drug use. Related to the occupational patterns was the same pattern of relatively high drug use among females in that same age range.

Family Impacts

Sociological research on the impacts of unemployment and labour adjustment have identified the mitigating role of social support resources (Cobb & Kasl, 1979; Linn et. al., 1985; House, 1981; Binns & Mars, 1984; Liem & Liem, 1988). However, it has also been commonly recognized that one of the paradoxes of unemployment and occupational stress is the destructive force these conditions have on the very sources of support that are most necessary to cope with stress - principally the nuclear family (House, 1981; Hayes & Nutman, 1981; Powell & Driscoll, 1973; Grayson, 1985)

The CLAND study examines both the ameliorative role of social support and the impacts of labour adjustment on the families of affected employees. A social support scale was created by combining five questions related to respondents’ access and connection to non-spousal sources of support. A separate three-item scale measured the degree of emotional and instrumental assistance respondents receive from their spouses.

The family portrait of CLAND respondents is consistent with the somewhat older age profile of the sample. The large majority are married or in common law relationships. Almost half of the households consist of just the respondent and their partner. The median number of dependents living at home is one.

A high percentage of respondents (61%) have a working spouse; thirty-six percent of spouses are either retired or homemakers. That the labour force participation of spouses is more than double that of respondents is striking, particularly given the demographics of the CLAND sample. Table 6 illustrates the relationship between respondents’ work status and that of their spouses.

Interestingly the group that would most likely to require additional income support from their spouse, the unemployed, are the least likely to have it, save for retirees. Further examination of spousal employment would suggest that this relationship is also significantly influenced by respondents’ age. Spousal employment declines with age, dropping dramatically to 37 percent for respondents over 55 years of age and their work status.

Table 6: Spousal Employment by Respondent Work Status

In general, most respondents reported high levels of social and spousal support, averaging 5.6 and 6.2 respectively, on a scale ranging from one to seven. The particularly strong perceptions registered for spousal support limited the analysis that could be performed due to the scarcity of cases in the bottom half of the scale. The greater variation noted for social support allowed the researchers to examine its relationships with other variables.

Social support was associated with various demographic factors; it decreased with age, was higher among females, and was significantly lower among residents of Quebec. Although the first two associations are consistent with the social support literature, the regional finding was surprising.

The connection between social support and economic outcomes was also clearly borne out by the data. Individuals who were unemployed reported the lowest levels of support as did those whose economic condition had worsened over the previous year and people who were least satisfied with their CRP decision.

What the Spouses Had to Say

As a compliment to the quantitative respondent data, the CLAND project conducted a series of focus groups with the spouses of CRP recipients to probe their impressions of the impacts of departure on the employees and their families. Conducted in the Spring of 1998, the focus group results correspond to a point in time roughly equivalent to the 21-month interval. A total of eight focus group sessions were scheduled at four metropolitan centres where National Defence had a major presence: Halifax, Victoria, Montreal, and Ottawa. At each location, separate sessions were held for male and female spouses. The focus groups were conducted by Ekos Research, working closely with the CLAND research team. Group size averaged nine participants, falling below that level on only two occasions where difficulties were experienced recruiting male spouses.

A considerable breadth was noted in the picture of adjustment received from the spouses, the variation driven largely by the proximity of the departing employee to the normal retirement age. As almost half of our survey sample was over 50 years of age and thus tended to view departure as an early transition into retirement, their spouses reported family experiences typical of that adjustment. For most in that situation, the impacts of departure were deemed as relatively moderate.

A different story emerges for younger individuals for whom retirement was not an option. As documented in the Wave One report, CRP recipients universally invested the bulk of their buyout monies into RRSP accounts in order to take advantage of available tax shelter provisions. Consequently, younger workers were often faced with a pressing cash-flow problem and a strong requirement to re-enter the workforce. Individuals successful in finding work shortly after leaving National Defence seem to have parlayed their departure into a positive experience, whereas the spouses of individuals experiencing a prolonged job search tend to describe a more difficult adjustment for the employee and their families.

On the decision

One message that echoed loudly from spouses across all age bands was a critical view of the work environment in National Defence during the period leading up to the CRP reductions. The negative atmosphere and climate of insecurity created by the cuts were identified by the spouses as significant factors behind employees’ decisions to accept the buyout. Indeed, many spouses supported that decision as the preferred alternative to remaining in an increasingly stressful workplace.

Generally, spouses whose partners were close to retirement were less apprehensive than those whose spouse would have to seek work. Younger couples were more dependent on the DND paycheque and more concerned with the prospect of its loss.

On the post-departure outcomes

The information from the focus groups provides a fuller, more descriptive sense of the post-DND work history experienced by our sample. The spouses confirmed that departure meant a direct shift into retirement for many older workers. For a large number of older workers, however, it represents "semi-retirement" as they explored different means of supplementing their retirement income. This information contrasts somewhat with the survey results and suggests an under-reporting of paid employment or self-employment by retirees.

For non-retirees, an extremely diverse mixture of outcomes is described. A number of employees gained employment shortly after departure but the majority seem to have fallen short of matching their DND earnings. Forays into self-employment appear to have been especially unstable and disappointing to the spouses - another piece of information not fully conveyed in the survey results.

On the financial impacts

With the exception of those cases in which the CRP recipient gained equivalent or better employment shortly after leaving National Defence, most spouses report a worsening of household financial conditions and a heightened concern about the family’s financial future. Significant cutbacks in expenditures are consistently reported – in contrast somewhat to the survey results in which only one-third report having to make cutbacks. For spouses of retirees who have prepared for that inevitability, the impacts are relatively minor in comparison to the severe decline cited by spouses of younger workers and older workers less-prepared for a comfortable retirement. As one spouse from Victoria stated "...we sacrificed on the way up and we were almost there only to have the rug pulled out from under us - just when it looked like we might be comfortable".

Another theme emerging from the discussion of financial impacts was the need for spouses to increase their financial contribution. Many spoke of the increased importance of their income as means of compensating for the reduced cash-flow caused by their partner’s departure from DND. The greater reliance on the spousal earnings was expressed by both genders. This would seem to be supported by the survey finding that the rate of spousal employment was twice that of respondents.

On the family and the relationship

The most poignant contribution of the focus group research was generated by the discussion of the emotional impact that the CRP has had on the recipient, the spouse, and relationships within the family. Focus group participants showed surprising candour in recounting the emotional impacts of the adjustment process in the period leading up to the cuts and in their aftermath. Prior to departure, the uncertainty and stress in the workplace appears to have been very difficult for spouses and employees alike.

In each of the eight sessions, several participants spoke of the sadness associated with watching their partner’s self-esteem decline as they sought to acquire meaningful work. Spouses described the emotional support they provided in response to the lost confidence, isolation, and depression being exhibited by their partners. For many families this was their first experience with displacement and they were not prepared for the stress and marital tension it brought.

The exception, again, was found among spouses of older, retiring employees who endured only the normal withdrawal symptoms associated with retirement. In those instances, many reported a renewed closeness in their relationship.

There was little evidence that the adjustment process had any deleterious impacts on children. Due to the overall age of our sample, presence of children in the household was low. Only a few spouses commented that their offspring were adversely affected by the family’s reduced cash-flow or parental stress.

The spouses also strongly suggested that they could have benefited from counselling sessions to prepare them for the emotional changes associated with job loss. Most seemed to have under-estimated the impact that job loss could exact on their partners and themselves

Conclusion

The third installment of the CLAND study presents information on the adjustment process at a point twenty-one months from the time at which individuals were initially offer a departure incentive under the Civilian Reduction Program. The Wave Three data provide valuable information on the employment outcomes of CRP recipients and the first opportunity to discern potential longitudinal effects.

Almost two years from time-of-offer, all CRP takers have left National Defence and are a considerable distance into their post-departure adjustment. For the largest portion of the departing employees, around 40 percent, that transition has represented an early shift into retirement. For an overwhelming majority of retirees, a complete withdrawal from paid employment is reported, although qualitative information generated from focus groups held with spouses suggests the practice of various income-supplementing pursuits.

The Wave Three results demonstrate a slight but steady growth in the proportion of CRP takers who have secured a foothold in the external labour market. Approximately 28 percent reported employment at the 21-month interval, up from 20 percent at Wave Two. Among those who were working at Wave Three, 40 percent were in traditional wage employment (full or part-time) while 34 percent claimed self-employment and 26 were engaged in contract work.

Several findings continue to support the assertion that human capital plays a large role in determining employment outcomes. Success in finding work was positively associated with increased educational achievement, higher ratings of skill portability, and Scientific/Professional designation.

A more troubling finding emerging from the study is that fully one-quarter of former DND employees were unemployed almost two years from the date of CRP offer. Age has a significant impact on employment; workers in the 35-54 age band were almost twice as likely as younger or older workers to be unemployed. The CLAND results also reveal that the displaced DND employees are turning to the state for assistance. Sixty percent of non-retirees reporting having applied for EI benefits and 42 percent of that number were receiving EI at the time of the 21-month interview.

The adverse impacts of job loss are noted in several measures of individual well-being where the unemployed exhibit statistically significant differences from the balance of the sample; in areas of health, economic circumstances, psychological well-being and social support.

The "economic honeymoon" affect described in earlier reports continues for CRP takers at the 21-month interval. Individuals who accepted the CRP were significantly more likely to identify economic improvements over the previous year. Interestingly, however, the gap between CRP takers and decliners has closed sharply over the course of the study, owing primarily to a decline reported by the unemployed and the retired. A relatively poor economic assessment persists among those who remain Departmental employees. They are still almost three times as likely to report a decline in economic conditions than to have indicated an improvement in this area.

The results from a series of focus groups conducted with the spouses of CRP recipients provide a complimentary perspective to the survey findings. The spouses affirmed the relatively modest impacts experienced by the large number of the sample for whom departure meant retirement but also provide insight into the significant emotional and financial impacts registered by the smaller portion of recipients wrestling with displacement.

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Appendix 1: Scale Construction and Validation Procedures

In a number of instances, items were combined to establish indices of particular concepts. These indices were of two types: Likert scales and combined measures. In both instances, questions have response categories along a continuum ranging from 1 to 7, where low values generally mean strong negative responses and high values denote strong positive responses. In cases where the scale was reversed, item codes were transposed prior to the calculation of the final summary measure. Thus, for all the indices cited in this report, low values are strongly negative while high values are strongly positive responses to a given topic. To retain the original 7-point scale and accommodate missing data, the summary measures were calculated by averaging the individual item values.

The Likert scales require a minimum of four variables to generate meaningful alpha coefficients used to measure inter-item reliability. In situations where the condition for Likert-type scales could not be met, but two or three similar variables were moderately correlated, the items were combined to create a stronger overall measure. The following is a more detailed explanation of each summary measure constructed for this report.

In all, seven Likert scales were created:

Locus of control: scale consists of five questions with response categories that range from "strongly disagree" to "strongly agree". Study participants were asked to give their feelings on the following statements: (1) "many of the unhappy things in people’s lives are partly due to bad luck"; (2) "getting a good job depends mainly on being in the right place at the right time"; (3) "many times I feel I have little influence over the things that happen to me"; (4) "I just don’t get breaks, and there’s no reason to believe I will in the future"; and (5) "I don’t expect to get what I really want". Scale reliability, as calculated by Cronbach’s alpha coefficient, is moderate but acceptable (a =.65).

Self-esteem: scale is comprised of four statements in which the individual rates each along a continuum from "almost never true" to "almost always true". The statements deal with whether the respondents: (1) felt that they were "...a person of worth, at least on an equal plane with others"; (2) had "...a number of good qualities"; (3) "...able to do things as well as most other people";, and (4) take "...a positive attitude towards myself". Cronbach’s measure for internal reliability is fair for the self-esteem scale (a =.75).

Personal aspirations: scale is constructed from five questions identifying what respondents feel is most important in a job. Responses range from "not at all important" to "extremely important" and include questions on the significance of: (1) "having work that is challenging"; (2) "having the opportunity to learn new things"; (3) "using your skills to the maximum"; (4) "having the opportunity to make your own decisions"; and (5) "extending your range of abilities". The reliability coefficient (Cronbach’s alpha) for the personal aspirations scale is high (a =.77).

Depression: scale is measured by 15 items asking the respondent to rate how they felt over the past month. Individuals could respond on a range from "rarely/none of the time" to "most/all of the time" for the following statements: (1) "...been able to concentrate on whatever you’re doing"; (2) "...lost much sleep over worry"; (3) "...felt that you are playing a useful part in things"; (4) "...felt capable of making decisions about things"; (5) "...felt constantly under strain";, (6) "...felt you couldn’t overcome your difficulties"; (7) "...been able to enjoy your normal day-to-day activities"; (8) "...been able to face up to your problems"; (9) "...been feeling unhappy and depressed"; (10) "...been losing confidence in yourself"; (11) "...been thinking of yourself as a worthless person"; (12) "...been feeling reasonably happy all things considered"; (13) "...had thoughts of ending your life", (14) "...did not feel like eating; your appetite was poor"; and (15) "...had crying spells". The summary measure for depression has a high alpha coefficient (a =.90), indicating strong internal item reliability.

Anxiety: like the depression measure, this scale assesses the individuals’ internal state over the past 30 days. Study participants could choose answers ranging from "not at all" to "very much so" on questions which asked about the extent to which they felt: (1) "calm"; (2) "tense"; (3) "nervous"; (4) "relaxed"; (5) "worried"; (6) "frightened"; and (7) "stressed overall". Internal reliability coefficient for the anxiety scale is high (a =.89).

Spousal support: scale measures the degree of emotional and instrumental assistance respondents receive from their partners. Responses to the three questions range along a continuum from "no support at all" to "extremely supportive" and include questions on the extent of "trust", "emotional support" and compatibility on "family objectives" respondents have in their relationship. Internal reliability for the spousal support measure is fair (a =.77).

Economic condition: scale measures the extent to which respondents and their households are economically worse off, the same, or better off than they were a year ago. Study participants were specifically asked about their "savings", "debt load", and "standard of living" over the past year. Internal reliability for this measure is moderate (a =.66) as indicated by Cronbach’s alpha.

Social support: scale was created by combining five variables designed to determine (a) the extent to which respondents access informal social contacts beyond their spouse/partner, (b) whether they can rely on someone for emergency cash, (c) whether their friends and family would make it difficult to relocate, (d) whether there is someone aside from their spouse who they can trust for advice, and (e) whether they have positive relationships with their coworkers. Correlations ranged from 0.08 to 0.35 for these variables, while the internal reliability for this measure is moderate (a =.63).

Work orientation was initially conceived as a 7-item scale inquiring about respondent’s personal beliefs on the importance of work and achievement. Individual scale items covered questions such as: "...it is important to have a regular job", "I like to work", and "in the future I expect to succeed in what concerns me most". However, Cronbach’s alpha for this scale was low (a =.39), indicating poor internal reliability. Further investigation of the individual questions revealed that respondent’s answers were consistently grouped at the high end of the response scale, leaving very little item variance. This, combined with low correlations amongst the variables, suggested that an item analysis would be preferable to the summary scale technique.

In addition to the Likert type scales, several combined measures were formed:

Achievement orientation: three questions inquired about respondents’ attitudes towards work, with response choices ranging form "almost never true" to "almost always true". Study participants were asked whether: (1) "I do my best work when my job assignments are fairly difficult", (2) "I try to perform better than my co-workers" and (3) "I take moderate risks and stick my neck out to get ahead at work". Correlations amongst these three variables range from 0.18 to 0.26.

Happiness: two global questions dealing with the individual’s level of happiness and life satisfactions were combined (r = .69) to make one overall happiness variable.

Portability of skills: respondents were probed about the value of their skills in the job market and their relevance outside the federal public service. The two questions were combined (r = .18) to form a single variable reflecting skill portability.

Literacy: two questions tapping language and numerical skills formed a composite index of overall literacy skill (r = .51).

Satisfaction with CRP decision: an overall measure (r = .49) of respondent’s satisfaction with their decision whether or not to accept the CRP was derived from two specific questions: one on direct satisfaction with decision, the other one on propensity to make the same decision again.

Appendix 2: Data Collection Technique

All interviews in the CLAND study were conducted by Ekos Research Associates under contract to the Union of National Defence Employees. Ekos employed a computer-assisted telephone interviewing (CATI) system to perform the interviews. The CATI system produces high quality data through its process of instantaneous data entry and its capability to follow the complex skip patterns embedded in the questionnaire.

The number of callbacks (repeated attempts to contact respondents) was specified as ten, a level that exceeds industry standards. The callback rate was set high in order to minimize attrition. The telephone interviews averaged 28 minutes in length, two minutes under the allocated time.

The research project also anticipated a requirement to respond to concerns that participants might express regarding any aspect of the adjustment process. Field staff were instructed to direct respondents to different project resources, depending on the nature of their question. The sources of assistance included: a 1-800 number for the CLAND research team, the DND hot-line, and the Ekos survey center. Although a few of individuals did request contact from a project representative, the number was very low (under 40).