Trucking Deregulation and Labor Earnings: Is the Union Premium a Compensating Differential?

This article examines wage determination among union and nonunion truck drivers using the 96 monthly Current Population Surveys for 1983-90. Union density in the previously regulated for-hire sector of the trucking industry fell from about 60% during the regulatory period of the 1970s to about 25% by 1990. Union log wage premiums fell from 0.40 in the 1970s to 0.30 or below in the 1980s. Longitudinal estimates from multiple panels for 1983-84 through 1989-90 suggest far smaller union premiums, supporting the thesis that part of the wage differential following deregulation is a compensating premium for driver quality.

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