 Returns to compensation in trucking: Does safety pay?Michael R Faulkiner and Michael H Belzer The Economic and Labour Relations Review, 2019, vol. 30, issue 2, 262-284 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 Keywords: Compensation systems; efficiency wages; employment experience; labour productivity; piecework; safety; truck drivers; trucking industry; wage policy; wages (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:ecolab:v:30:y:2019:i:2:p:262-284 Access Statistics for this article More articles in The Economic and Labour Relations Review |
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