Access Type

Open Access Dissertation

Date of Award

January 2015

Degree Type

Dissertation

Degree Name

Ph.D.

Department

Economics

First Advisor

Michael H. Belzer

Abstract

Driver turnover remains a significant problem in the truckload sector of the motor carrier industry and has been linked to large truck crashes. Large truck crashes remain a significant problem in the truckload sector of the motor carrier industry. Employing a unique firm level data set from a large U.S. truckload motor carrier, this research showed that higher driver pay reduced driver exit rates, significantly reduced a driver’s relative crash rate, reduced driver probability of sustaining a crash, and lowered the average cost of a crash for the cooperating firm.

This research identified two driver groups who were hired during two distinct pay regimes, where higher paid, experienced drivers in pay regime two experienced significantly improved driver retention rates at the firm. Experienced drivers also had lower average crash costs and were more productive during each tenure month. As a result, experienced drivers had a considerably larger expected discounted net present value when compared to inexperienced drivers. As the inexperienced drivers gained experience, their crash probabilities began to mirror those of the experienced drivers.

This research suggests that hiring quality drivers will reduce the quantity and severity of future crash incidents, increase driver retention, lowering the firm’s overall costs; and allow for freight rates to reflect the true cost of carrying freight, reducing the externality imposed on society, and thereby creating value for the firm and for society.

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