Truck driver pay has a very strong influence on driver safety, says a new study co-sponsored by the Federal Highway Administration and the Federal Motor Carrier Safety Administration. According to the study, which was headed by Wayne State University professor Michael H. Belzer, higher pay yields better safety performance. The report, entitled "Paying for Safety," asserts that driver pay is an important predictor of safe vehicle operation.

In fact, the researchers, led by project director Belzer, concluded, "Conservatively we can say that the relationship between safety and pay probably is better than 2:1."

To demonstrate the link between driver pay and safety, the researchers looked at three different data sets. The first set came from The National Survey of Driver Wages, referred to as Signpost, which studied 198 truckload (TL) firms in 1998. The second set of data looked at 11,540 drivers employed by the truckload carrier, J.B. Hunt, which increased wages to reduce crashes and turnover. Finally, the third data set was gathered by researchers from the University of Michigan Trucking Industry Program (UMTIP), which randomly surveyed drivers in truck stops in Michigan, Ohio, Indiana, Illinois and Wisconsin.

The Signpost data shows that driver compensation and truck crashes are inversely related. This means that for every percentage increase in compensation, there is a corresponding percentage decrease in crashes. In fact, the relationship is almost 1:1 with every 10% gain in average driver compensation, which includes mileage rate, unpaid time, anticipated annual raise, safety bonus, health insurance and life insurance, accompanied by a 9.2% decrease in crashes for the average carrier.

However, compensation forms have varying degrees of importance. For example, paid time off and production bonuses do not have a substantial effect on safety while safety bonuses do. (The study found that 49% of firms give a safety bonus). Also, while most compensation variables are significant at the 0.01% level, a pay raise doesn't become a major factor until the 10% level. But as a whole, the impact of compensation variables on safety is strong.

The first data set also uncovered some more figures to keep in mind. For example, the typical run is 905.85 miles. In addition, for drivers with three years of experience, the average pay is $0.286 per mile. Expected yearly pay raises are $0.0007 per mile on average.

The second set of data, which looked at J.B. Hunt drivers over two 13-month periods, also supports the assertion that driver pay influences driver performance. This study discovered that, at the mean, if a driver is given a base pay rate that is 10% higher than standard, then the driver will be 34% less likely to crash than the average truck operator. In addition, for every 10% pay raise that a driver receives, his or her crash risk will decrease by 6%.

Pay raises, however, are not the only factor in this performance jump since the drivers who get pay hikes tend to be safer than others.

The J.B. Hunt study also led to some other interesting, and unexpected, findings. For example, it revealed that unmarried drivers are safer. Also, drivers are safer in winter. Furthermore, the study found that driver crash risk declines with age until the driver hits 41 years of age, during which time the opposite effect is observed. This means that, all things being equal, a 20-year-old driver has a comparable crash risk to that of a 62-year-old driver.

The third data set included random interviews of 1,000 over-the-road drivers, but the analysis was limited to "employee" drivers who are paid a mileage rate. Findings reveal that a 10% hike in mileage rate from $0.295 to $0.324 leads to a 21% reduction in the probability of a crash from 13.8% to 10.86%. In addition, increasing the number of paid days off has a similar, albeit less significant, effect on estimated crash risk. A 10% increase in the number of paid days off results in a 7% decrease in the crash risk from 13.8% to 12.79%.

The UMTIP data also revealed that drivers are less likely to work long hours if they are paid more. This effect kicks in after a certain level of pay: For example, at 20 cents per mile, drivers, on average, will want to work 48.9 hours to meet target earnings. At 25 cents per mile, they will choose to increase works hours to 60.1 while at 31.4 cents per mile, they will be motivated to work 65.1 hours. The trend reverses above this pay level. When they are paid 37.8 cents per mile, on average, they will prefer to work for 59.9 hours. At 42.1 cents per mile, the figure drops to 50.6 hours.

Overall, the study clearly demonstrates that higher pay leads to safer driving. In fact, these results are in keeping with economic theory, which says that drivers are paid according to their market value, which is determined by training, work experience and skill, among others. In addition, the researchers write, "We also find that a pay increase appears to have an ‘incentive' effect that results in safer driver behavior."

Sources: Paying for Safety: An Economic Analysis of the Effect of Compensation on Truck Driver Safety
Michael H. Belzer, Daniel Rodriguez and Stanley A. Sedo
Executive Summary, Sept. 10, 2002
http://www.ilir.umich.edu/sweatshopsonwheels/PayAndSafetyExecSum.pdf