Labor Rent Sharing and Regulation: Evidence from the Trucking Industry

Nancy Rose

Journal of Political Economy, 1987, vol. 95, issue 6, 1146-78

Abstract: Labor is likely to be an important claimant to firms' rents, particularly in a regulated environment. This study analyzes wage responses to trucking deregulation to test labor rent-sharing hypotheses. The results indicate substantial declines in union wages as a consequence of reduced regulatory rents. Union premia over nonunion wages fell from 50 percent to less than 30 percent, implying aggregate annual losses of $950 million to $1.6 billion. Rent spillovers to nonunion drivers and truck drivers outside the regulated trucking industry appear insignificant. The results suggest that union workers captured more than two-thirds of total industry rents and provide strong support for union rent-sharing hypotheses. Copyright 1987 by University of Chicago Press.

Date: 1987
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