This paper uses a set of "natural experiments," created by the passage of a U.S. Department of Transportation drug-testing mandate and 13 state testing laws, to examine the effects of testing truckers for illicit substances on highway safety. Since truckers do not bear the full costs of their driving and employers cannot contract on all aspects of their behavior, drug testing may be one means for companies to either screen or monitor employees and lower expected accident costs. Indeed, I find that testing led to a 910 percent reduction in truck accident fatalities. The social benefits of mandated testing appear to outweigh the costs of the program. However, the similarity between the effect of mandating testing and simply clarifying state law suggests that extending the right to perform drug tests may have been as effective at lower cost. (Author/publisher)
Abstract