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5.1 Job Search

There was very little difference between POWA participants and the comparison group in terms of job search following the layoff. Slightly more POWA participants stated they actively searched for employment (69 per cent) than the comparison group (64 per cent). POWA participants and the comparison group were equally likely to have begun their job search prior to their actual layoff. Over 80 per cent of respondents in each group indicated they were searching for year round employment following their layoff.

5.2 Labour Market Outcomes

Despite the similarity in their job search activities, the employment outcomes were substantially different for POWA participants and the comparison group, particularly on the key measure: did workers find employment following their layoff? The bivariate results indicate that POWA participants had a lower incidence of re-employment following layoff compared to the comparison group. Changes introduced to the program under Regime 2 did not increase the labour market participation of this group. In both Regime 1 and Regime 2, only 19 per cent of POWA participants found full-time or part-time employment following their layoff. This is in sharp contrast to the 39 per cent of comparison group workers who found employment following their layoff. In terms of current employment status, few individuals from either the participant or the comparison group are now employed (four and seven per cent of Regime 1 and Regime 2 participants were employed full-time or part-time at the time of the survey respectively, compared to 20 per cent of the comparison group). The jobs which were found by POWA participants were less stable and offered less pay than the comparison group. Of those POWA participants who were employed following their layoff, their current or most recent job was often temporary or casual (47 per cent) and less than 40 hours per week (51 per cent). Average weekly earnings were $581 and few workers had fringe benefits at their job (18 per cent).

While the bivariate analysis indicates that there are significant differences between the POWA participant and comparison groups with respect to employment outcomes, a multivariate analysis was conducted in order to examine whether these differences were due to participation in the POWA or were the result of pre-existing differences between the groups. Profile data had indicated that the participant and comparison groups were significantly different in terms of some basic background characteristics (e.g., education, age and income).

The multivariate results confirmed the POWA participants were less likely to have found a job and less likely to have found a full-time job in the post-layoff period than the comparison group. Older, female workers were less likely to be employed following their layoff. Workers in the service sector, those with higher levels of education (Regime 2 only) and with higher pre-layoff earnings were more likely to have found a job following their layoff.

5.3 Earnings and Income

(a) Earnings

Earnings and income data for both the participant and comparison groups were examined using administrative data. All groups examined in this evaluation POWA participants, non-certified participants and the comparison group experienced a substantial loss of earnings in the years subsequent to their layoff, with the average earned income diminishing each year following the layoff.

All earnings results were segmented by age and include all workers (i.e., with and without earned income). One year prior to layoff, younger POWA participants (55 to 59 years of age) under Regime 1 earned approximately $32,000 and $29,000 under Regime 2. In the first year after the layoff, the Regime 1 younger participants had earned income of only $4,000 (a decrease of $28,000 from the year prior to the layoff) and Regime 2 reported average earnings of about $2,000 (a decrease of approximately $27,000).

The earnings results further confirm that the program changes implemented in Regime 2 did not stimulate more labour market participation. The earnings of the Regime 1 participants were generally equal to the level of earnings for the Regime 2 participants. There were differences, however, by the age of the participant, with the older age group (60 to 64) experiencing a greater loss in earnings than the younger age group.

The average earnings of the comparison group in the year prior to the layoff was similar to the POWA participants in Regime 1, but approximately $4,000 higher than Regime 2. The post-layoff earnings of the comparison group, however, were substantially higher than the POWA participants because proportionately more individuals were working and, of those who were working, their earnings were higher on average than POWA participants. For example, younger comparison group workers experienced a loss of earned income in the order of $20,000 in the first year following layoff.

The multivariate models confirm that employment earnings were lower for POWA participants than for the comparison group following the layoff. Controlling for earnings the first year after the layoff, Regime 1 participants earned about $2,000 less than the comparison group two years after the layoff and $2,600 less four years after the layoff. For Regime 2 participants, earnings were $1,500 less than the comparison group two years after the layoff and $3,300 less four years after layoff. The most significant predictor of earnings two and four years after layoff was earnings one year after the layoff.

(b) Total Income

One year prior to the layoff, Regime 1 POWA participants had a total annual income of approximately $37,000, while in Regime 2 the average annual income one year prior to the layoff was lower at $34,000. During the layoff year, although total earned income was reduced substantially (depending on when during the calendar year the layoff occurred), other sources of income such as severance packages and UI resulted in total average annual incomes that were often higher than the year prior to the layoff.

In the first year following the layoff, the POWA participants experienced a large income loss, approximately $13,000. This loss was about the same for participants from both regimes and across the younger and older age groups. Participants' income remained relatively stable and, in fact, increased gradually starting in the second year after their layoff.

Similar to the participant group, the comparison group workers' total income fell in the first year after the layoff by approximately $12,000 to $13,000. In the second year after the layoff, the comparison group had a further drop in their income of approximately $2,000 to $3,500. Their income had stabilized in the third year and rose four years after their layoff.

Government income sources and pensions were important sources of income for both the participant and comparison groups. In the layoff year and the year following layoff, UI was the most important source of government income. UI was more important for the comparison group, particularly younger workers. CPP payments become more important in each year subsequent to the layoff as workers reach age 60 (the majority claimed CPP prior to reaching age 65). Only a minority of those in the participant or comparison group collected social assistance following their layoff (five per cent and eight per cent respectively).

Private pensions, while an important source of income for all groups, was higher for the Regime 1 participants than Regime 2. Being a recipient of a company pension has a significant impact on the income of older laid-off workers. The zero benefits group who had the highest levels of company pension income also had the highest average total income. Conversely, non-participants who were from layoffs which were not served by the program (typically because their layoff did not meet POWA's size criteria), had the lowest company pension income and the lowest average income.

After controlling for earnings the first year after layoff, the multivariate analysis indicated that, although POWA participants' earned income was significantly lower than the comparison group, total income two years after the layoff was higher than the comparison group for Regime 1 participants (about $3,000 higher) and about equal for Regime 2 participants. Four years following the layoff, the initial income advantage among Regime 1 participants disappears and Regime 2 participants, at this time, have a total average income that is about $3,300 less than the comparison group.

5.4 Assets and Debts

Bivariate survey data were used to examine the impacts of the program on participants' overall financial situation. POWA participants were less financially secure at the time of the layoff than the comparison group. Participants had less savings and residential capital. The net change in workers' financial situation between the time of the layoff and the time of the interview varies significantly across the groups. For Regime 1 participants, their financial status improved between the time of the layoff and the survey interview a positive difference of $2,460. For Regime 2 participants, however, the change in financial situation was negative a loss of about $1,350 since the layoff. The comparison group improved their situation, increasing the value of net assets by about $5,000 between the time of the layoff and the time of the survey interview.

The multivariate analysis included a model to predict current net assets (savings minus debts) controlling for savings and debts at the time of the layoff. Differences in current net assets between Regime 1 and the comparison group were not significant. Current net assets of the comparison group were $4,000 higher than participants in Regime 2, however, after controlling for earnings one year after layoff, this difference became non-significant.

Survey respondents were asked to indicate what types of financial consequences resulted from their layoff. The majority of workers (over 80 per cent of all the participant and comparison groups) cited at least one financial consequence following their layoff. The most likely impact of the layoff for both participants and the comparison group was a reduction in expenses about three-quarters of workers in all groups reported having to reduce their expenses following their layoff. The second most frequently mentioned impact of the layoff was on individuals' personal savings. Consistent with the financial data reported above, Regime 2 POWA participants were somewhat more likely than Regime 1 participants or the comparison group to report dipping into their savings as a consequence of their layoff.

The remaining impacts of layoff borrowing from financial institutions or family and friends, selling assets, getting help from charities or declaring bankruptcy, were mentioned far less frequently. These effects were mentioned in similar proportions by POWA participants and the comparison group.

5.5 Non-Labour Force Outcomes

A significant portion of workers in all groups felt that their current standard of living is much worse compared to the time of their layoff. Regime 2 POWA participants were the most likely to express this sentiment.

POWA participants were more satisfied with their overall quality of life than the comparison group. About one-half of Regime 1 participants and 46 per cent of Regime 2 participants reported being very satisfied with their life overall compared to one-third of the comparison group workers. On all indicators (e.g., satisfaction with family time, recreational activities), Regime 1 participants expressed higher levels of satisfaction than Regime 2. All groups expressed least satisfaction with their financial situation.

The majority of workers (between 77 and 80 per cent) are not members of voluntary, charity or community organizations. Those who are members of these organizations are quite active, spending between 18 and 23 hours per month on average on their voluntary activities. POWA participants in both Regime 1 and Regime 2 were only slightly more likely than the comparison group to be a member of a voluntary organization and spent between five and six more hours per week on these activities than the comparison group.

About one-third of surveyed participants rated their current health as excellent, while seven per cent or less indicated that their health was very poor. POWA participants, particularly Regime 2 participants, provided a poorer rating of their health compared to the comparison group. The older age profile of the respondent group translates into quite significant use of health care services, though there were few differences among the groups on these indicators.

The vast majority of workers in all groups (between 82 and 91 per cent) have remained in their communities since the layoff. Workers in the comparison group were most likely of all the groups to have relocated outside their community following their layoff.