Paying for Safety: An Economic Analysis of the Effect of Compensation on Truck Driver Safety: Executive Summary

This report examines the link between truck driver pay and driver safety. It establishes a relationship that is important for policy purposes because it suggests that low driver pay, which we expect is linked to low but unmeasured human capital, may be an important predictor of truck driver safety. The study uses three different data sets at three different levels of analysis to demonstrate this link. The study also includes an estimation of the truck driver labor supply curve, an important contribution to understanding drivers’ (and carriers’) preferences for balancing income and work time. One model includes the entire population of drivers at a very large truckload motor carrier and uses survival analysis (also known as duration modeling) to measure individual crash probabilities over time while controlling for individual and work characteristics. Another model uses a cross section of more than 100 truckload carriers to link driver pay with safety performance across firms. The third model uses a representative sample of individual drivers across all firms engaged in over-the-road operations to demonstrate the effect of driver pay in predicting crashes.