Deregulation and the Competitive Fringe: Owner-Operators in the Trucking Industry.

This paper assesses the direct and indirect effects of regulatory reform in the trucking industry on the employment of owner-operators. We utilize a probit estimation form derived from driver utility functions to estimate the change in the probability that a truck driver is an owner-operator following deregulation. We find that a representative driver with mean characteristics is 155.6 percent more likely to choose employment as an owner-operator in the deregulated environment. Thirty-six percentage points of this increase is due to the indirect effects of deregulation, which operate primarily through changes in wage differentials and unionization. The direct effect of deregulation accounts for a 120 percent increase in the probability of a driver choosing employment as an owner-operator. Copyright 1995 by Kluwer Academic Publishers