IDEAS home Printed from https://ideas.repec.org/a/eee/retrec/v10y2004i1p137-164.html
   My bibliography  Save this article

7. Shifting Gears In The Corner Office: Deregulation And The Earnings Of Trucking Executives

Author

Listed:
  • Burks, Stephen V
  • Guy, Frederick
  • Maxwell, Benjamin

Abstract

We study the earnings of executives of for-hire trucking companies from 1977 to 1986. Following deregulation of the U.S. trucking industry in 1979-1980, the real earnings of trucking firm executives (corporate officers) fell for a year or two, but then stabilized and, in the mid-1980s, recovered. Profit rates also fell immediately after deregulation, and then leveled off. The earnings of employee drivers, on the other hand, went into steady decline from 1979 to past the end of the period studied here. To analyze these trends we use a version of the Motor Carrier Financial and Operating Statistics, collected by the Interstate Commerce Commission on all medium-sized and large trucking firms for the years 1977-1986. Our version is unique in breaking out annual employee earnings by employee category for this time period. We document the change in the relative earnings of drivers and executives within the same trucking firms over time. We test the predictions of principal-agent theory and the political constraint model concerning the effect of deregulation on the level and performance sensitivity of executive pay, and find evidence favoring political constraint over principal-agent. We also explore the effects of union presence and union busting on the pay of executives, and find that officers in unionized firms get paid more on average, but that officers' pay increases when a unionized firm goes non-union.

Suggested Citation

  • Burks, Stephen V & Guy, Frederick & Maxwell, Benjamin, 2004. "7. Shifting Gears In The Corner Office: Deregulation And The Earnings Of Trucking Executives," Research in Transportation Economics, Elsevier, vol. 10(1), pages 137-164, January.
    • Handle: RePEc:eee:retrec:v:10:y:2004:i:1:p:137-164
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0739-8859(04)10007-3
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 255-283.
    2. Baker, George P & Jensen, Michael C & Murphy, Kevin J, 1988. " Compensation and Incentives: Practice vs. Theory," Journal of Finance, American Finance Association, vol. 43(3), pages 593-616, July.
    3. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    4. Geddes, R Richard, 1997. "Ownership, Regulation, and Managerial Monitoring in the Electric Utility Industry," Journal of Law and Economics, University of Chicago Press, vol. 40(1), pages 261-288, April.
    5. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    6. Fred Guy, 2000. "CEO Pay, Shareholder Returns and Accounting Profitability," Working Papers wp155, Centre for Business Research, University of Cambridge.
    7. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
    8. Hubbard, R. Glenn & Palia, Darius, 1995. "Executive pay and performance Evidence from the U.S. banking industry," Journal of Financial Economics, Elsevier, vol. 39(1), pages 105-130, September.
    9. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    10. Moore, Thomas Gale, 1978. "The Beneficiaries of Trucking Regulation," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 327-343, October.
    11. Frederick Guy, 2000. "CEO Pay, Shareholder Returns, and Accounting Profits," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 7(3), pages 263-274.
    12. Monaco, Kristen A. & Brooks, Taggert J., 2001. "Deregulation and wages in trucking: A time series phenomenon -- A time series approach," Research in Transportation Economics, Elsevier, vol. 6(1), pages 55-69, January.
    13. Rose, Nancy L, 1987. "Labor Rent Sharing and Regulation: Evidence from the Trucking Industry," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1146-1178, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Burks, Stephen V. & Monaco, Kristen & Myers-Kuykindall, Josephine, . "Industry Issue Paper: Trends in the Use of Large Trucks by Truckload and Less-Than-Truckload Motor Carriers in the 1990s," Journal of the Transportation Research Forum, Transportation Research Forum.
    2. Peoples, James & Talley, Wayne K., 2007. "Earnings Differentials of Railroad Managers and Labor," Research in Transportation Economics, Elsevier, vol. 20(1), pages 259-281, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:retrec:v:10:y:2004:i:1:p:137-164. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.