IDEAS home Printed from https://ideas.repec.org/a/sae/ecolab/v30y2019i2p262-284.html
   My bibliography  Save this article

Returns to compensation in trucking: Does safety pay?

Author

Listed:
  • Michael R Faulkiner
  • Michael H Belzer

Abstract

Large truck crashes remain a significant problem in the truckload sector of the US motor carrier industry. Employing a unique firm-level data set from a large US truckload motor carrier, we identified two different driver groups hired during two distinct pay regimes. Before-and-after data on wages and safety outcomes created a natural experiment. Higher wages paid to experienced drivers in the new pay regime led to higher driver retention rates. Experienced drivers had lower average crash costs and were more productive during each tenure month. Experienced drivers had a much larger expected discounted net present value when compared with inexperienced drivers. As the previously inexperienced drivers gained additional experience, their crash probabilities and their value began to mirror those of the experienced drivers, demonstrating the value of greater tenure. This research supports ‘safe rates’ public policy because safety pays – for trucking companies, for cargo owners and for society. JEL Codes: J24, J28, J33

Suggested Citation

  • Michael R Faulkiner & Michael H Belzer, 2019. "Returns to compensation in trucking: Does safety pay?," The Economic and Labour Relations Review, , vol. 30(2), pages 262-284, June.
    • Handle: RePEc:sae:ecolab:v:30:y:2019:i:2:p:262-284
    DOI: 10.1177/1035304619833859
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1035304619833859
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1035304619833859?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rodriguez, Daniel A. & Rocha, Marta & Belzer, Michael H., 2004. "3. The Effects Of Trucking Firm Financial Performance On Driver Safety," Research in Transportation Economics, Elsevier, vol. 10(1), pages 35-55, January.
    2. Rose, Nancy L, 1987. "Labor Rent Sharing and Regulation: Evidence from the Trucking Industry," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1146-1178, December.
    3. Suzuki, Yoshinori & Crum, Michael R. & Pautsch, Gregory R., 2009. "Predicting truck driver turnover," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(4), pages 538-550, July.
    4. Hirsch, Barry T, 1993. "Trucking Deregulation and Labor Earnings: Is the Union Premium a Compensating Differential?," Journal of Labor Economics, University of Chicago Press, vol. 11(2), pages 279-301, April.
    5. Michael H Belzer & Stanley A Sedo, 2018. "Why do long distance truck drivers work extremely long hours?," The Economic and Labour Relations Review, , vol. 29(1), pages 59-79, March.
    6. Dale L. Belman & Kristen A. Monaco, 2001. "The Effects of Deregulation, De-Unionization, Technology, and Human Capital on the Work and Work Lives of Truck Drivers," ILR Review, Cornell University, ILR School, vol. 54(2A), pages 502-524, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Trick, Steven & Peoples, James & Ross, Anthony, 2021. "Driver turnover in the trucking industry: What's the cost of reducing driver quit rates?," Research in Transportation Economics, Elsevier, vol. 89(C).
    2. Sebastjan Škerlič & Vanja Erčulj, 2021. "The Impact of Financial and Non-Financial Work Incentives on the Safety Behavior of Heavy Truck Drivers," IJERPH, MDPI, vol. 18(5), pages 1-14, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ags:aaea22:335435 is not listed on IDEAS
    2. Dale Belman & Kristen Monaco, 2005. "Are truck drivers underpaid?," Applied Economics Letters, Taylor & Francis Journals, vol. 12(1), pages 13-18.
    3. Kawaguchi, Akira & Mizuno, Keizo, 2011. "Deregulation and labour earnings: Three motor carrier industries in Japan," Labour Economics, Elsevier, vol. 18(4), pages 441-452, August.
    4. Berger, Thor & Chen, Chinchih & Frey, Carl Benedikt, 2018. "Drivers of disruption? Estimating the Uber effect," European Economic Review, Elsevier, vol. 110(C), pages 197-210.
    5. Rodriguez, Daniel A. & Rocha, Marta & Belzer, Michael H., 2004. "3. The Effects Of Trucking Firm Financial Performance On Driver Safety," Research in Transportation Economics, Elsevier, vol. 10(1), pages 35-55, January.
    6. Fernandes, Ana P. & Ferreira, Priscila & Alan Winters, L., 2014. "Firm entry deregulation, competition and returns to education and skill," European Economic Review, Elsevier, vol. 70(C), pages 210-230.
    7. Timothy J. Richards & Zachariah Rutledge & Marcelo Castillo, 2024. "Labor shortages and agricultural trucking rates," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 72(2), pages 105-129, June.
    8. Barry T. Hirsch, 2008. "Wage Gaps Large and Small," Southern Economic Journal, John Wiley & Sons, vol. 74(4), pages 914-933, April.
    9. Monaco, Kristen A. & Brooks, Taggert J., 2001. "Deregulation and wages in trucking: A time series phenomenon -- A time series approach," Research in Transportation Economics, Elsevier, vol. 6(1), pages 55-69, January.
    10. Philip Du Caju & François Rycx & Ilan Tojerow, 2011. "Wage Structure Effects of International Trade: Evidence from a Small Open Economy," Working Papers CEB 11-011, ULB -- Universite Libre de Bruxelles.
    11. David A. Green, 2015. "Chasing after good jobs. Do they exist and does it matter if they do?," Canadian Journal of Economics, Canadian Economics Association, vol. 48(4), pages 1215-1265, November.
    12. Sebastjan Škerlič & Vanja Erčulj, 2021. "The Impact of Financial and Non-Financial Work Incentives on the Safety Behavior of Heavy Truck Drivers," IJERPH, MDPI, vol. 18(5), pages 1-14, March.
    13. Philip Du Caju & François Rycx & Ilan Tojerow, 2012. "Wage structure effects of international trade in a small open economy: the case of Belgium," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 297-331, June.
    14. Fleitas, Sebastián, 2018. "Who benefits when inertia is reduced? Competition, quality and returns to skill in health care markets," Research Department working papers 1161, CAF Development Bank Of Latinamerica.
    15. Barde, Sylvain & Klein, Alexander, 2021. "Transportation Costs in the Age of Highways: Evidence from United States 1955-2010," CAGE Online Working Paper Series 597, Competitive Advantage in the Global Economy (CAGE).
    16. Philipp Lergetporer & Jens Ruhose & Lisa Simon, 2018. "Entry Barriers and the Labor Market Outcomes of Incumbent Workers: Evidence from a Deregulation Reform in the German Crafts Sector," CESifo Working Paper Series 7274, CESifo.
    17. Jacobson, Mireille, 2003. "Drug Testing in the Trucking Industry: The Effect on Highway Safety," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 131-156, April.
    18. Trick, Steven & Peoples, James & Ross, Anthony, 2021. "Driver turnover in the trucking industry: What's the cost of reducing driver quit rates?," Research in Transportation Economics, Elsevier, vol. 89(C).
    19. Kristen Monaco, 2001. "Examining Industry Effects for Truck Drivers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(1), pages 91-103, February.
    20. Daniel A. Rodríguez & Felipe Targa & Michael H. Belzer, 2006. "Pay Incentives and Truck Driver Safety: A Case Study," ILR Review, Cornell University, ILR School, vol. 59(2), pages 205-225, January.
    21. Trick, Steven & Peoples, James, 2012. "Union compensation following intrastate deregulation: Evidence from the US trucking industry," Transport Policy, Elsevier, vol. 24(C), pages 10-18.

    More about this item

    Keywords

    Compensation systems; efficiency wages; employment experience; labour productivity; piecework; safety; truck drivers; trucking industry; wage policy; wages;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ecolab:v:30:y:2019:i:2:p:262-284. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.