Review of Industrial Organization 18: 91–103, 2001.
© 2001 Kluwer Academic Publishers. Printed in the Netherlands.
Examining Industry Effects for Truck Drivers
Economics Department, University of Wisconsin – Eau Claire, Eau Claire, WI 54702-4004, U.S.A.
Abstract. Disaggregating truck drivers by industrial classiﬁcation, rather than using a private car-
riage for hire distinction, a signiﬁcant wage gap is found between drivers in trucking services and
drivers in all other industries. The premium for drivers in trucking services is largest relative to drivers
in wholesale and retail trade and agriculture, who are most likely to be true private carriage drivers.
Drivers in construction and mining, less likely to meet the true deﬁnition of private carriage, have
smaller wage disadvantages. This suggests that the wage gap between for-hire and private carriage
drivers may be underestimated in other research.
Key words: Deregulation, industry effects, trucking, wages.
Motor Carriage is a complex industry which can be divided into two sectors, each
of which can then be further divided. At the most basic level, a distinction can
be made between the for-hire and private carriage sectors. For-hire ﬁrms are those
whose primary business is hauling freight whereas ﬁrms in private carriage typic-
ally haul their own freight while their primary business is something else.
Though the duties and characteristics of truck drivers are the same across these
sectors, their wages are not. Drivers in for-hire earned a mean of $12.70 per hour in
1995, substantially higher than the mean of $10.38 per hour earned by drivers clas-
siﬁed as private carriage (Hirsch and Macpherson, 1997). This wage differential is
not unexpected given that inter-industry wage differentials are prevalent within the
In examining the wage differentials across sectors for drivers, it is beneﬁcial
to further disaggregate the sectors into industrial categories. There are two pur-
poses of doing so. First, aggregating all drivers outside of the trucking services in-
dustry into private carriage may obscure industry wage differentials among drivers.
Second, when using data from the Current Population Survey, the accuracy of
the distinction between private carriage and for-hire is questionable. The bulk of
research into drivers’ wages and working conditions has relied upon the CPS as a
The author wishes to acknowledge the support of the University of Michigan Trucking Industry
Program which is funded by a grant from the Alfred P. Sloan Foundation. The author also wishes
to thank Dale Belman, Travis Koplow, and three anonymous referees for helpful comments and