Joshua D. Rauh

Senior Fellow
Biography: 

Joshua D. Rauh is a senior fellow at the Hoover Institution and a professor of finance at the Stanford Graduate School of Business. He formerly taught at the University of Chicago’s Booth School of Business (2004–9) and the Kellogg School of Management (2009–12).

Rauh studies corporate investment and financial structure, public pension liabilities, and the financial structure of pension funds and their sponsors. He has published numerous journal articles and was awarded the 2006 Brattle Prize for the outstanding research paper on corporate finance published in the Journal of Finance for his paper "Investment and Financing Constraints: Evidence from the Funding of Corporate Pension Plans." In 2011 he won the Smith Breeden Prize for the outstanding research paper on capital markets, published in the Journal of Finance, for his paper "Public Pension Promises: How Big Are They and What Are they Worth?" coauthored with Robert Novy-Marx. His other writings include "Earnings Manipulation, Pension Assumptions and Managerial Investment Decisions," coauthored with Daniel Bergstresser and Mihir Desai, which won the Barclays Global Investor Best Symposium Paper from the European Finance Association and appeared in the Quarterly Journal of Economics. Other work has appeared in the Review of Financial Studies, the Journal of Financial Economics, and the Review of Finance.

Rauh’s research on state and local pension systems in the United States has received national media coverage in outlets such as the Wall Street Journal, the New York Times, the Financial Times, and The Economist .

Rauh received a BA degree in economics, magna cum laude with distinction, from Yale University and a PhD in economics from the Massachusetts Institute of Technology.

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Recent Commentary

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A Tale of Six Cities: Underfunded Retiree Health Care

by Joshua D. Rauh, Robert C. Pozenvia Analysis
Friday, June 17, 2016

The growing costs of health care benefits for retired public employees—known as OPEB (other post-employment benefits)—pose a serious challenge to many city governments. In this paper, we analyze the retiree health care systems of six American cities: Boston, Minneapolis, Pittsburgh, San Francisco, San Antonia, and Tampa, Florida.

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The Public Pension Crisis

by Joshua D. Rauhvia Defining Ideas
Tuesday, April 12, 2016

Floundering state and local governments will have to turn to taxpayers to fund their retirement promises.    

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Hidden Debt, Hidden Deficits: How Pension Promises Are Consuming State And Local Budgets

by Joshua D. Rauhvia Analysis
Monday, April 11, 2016

Most state and local governments in the United States offer retirement benefits to their employees in the form of guaranteed pensions. To fund these promises, the governments contribute taxpayer money to public systems. Even under states’ own disclosures and optimistic assumptions about future investment returns, assets in the pension systems will be insufficient to pay for the pensions of current public employees and retirees.

Analysis and Commentary

Pension Fund Board Composition And Investment Performance: Evidence From Private Equity

by Aleksandar Andonov, Yael V. Hochberg, Joshua D. Rauhvia Social Science Research Network
Friday, March 25, 2016

We examine the governance of public pension funds and its relationship to investment performance. Pension fund board composition is strongly related to the performance of private equity investments made by the fund. Funds whose boards have high fractions of members who either sit on the board by virtue of their position in state government (ex officio) or were appointed by a state official underperform the most, followed by funds whose boards have a high fraction of members elected by participants.

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A Few Trillion Short

by Joshua D. Rauhvia Hoover Digest
Wednesday, January 27, 2016

Public-employee pensions are in a deeper financial hole than states admit—a much, much deeper hole.

Analysis and Commentary

State Taxation And The Reallocation Of Business Activity: Evidence From Establishment-Level Data

by Joshua D. Rauh, Xavier Giroudvia National Burea of Economic Research
Monday, September 14, 2015

In a sample of over 27 million establishments of U.S. firms with activities in more than one state, we estimate the impact of state business taxation on business activity. Only firms organized as subchapter C corporations are subject to the corporate tax code, whereas the income of partnerships, sole-proprietorships, and S corporations is passed through annually to the firm's owners and taxed at individual rates.

Featured

Unfunded Pension Debts Of U.S. States Still Exceed $3 Trillion

by Joshua D. Rauhvia Forbes
Tuesday, August 25, 2015

It’s well-known that there’s a huge financial hole in state-sponsored retirement plans for public employees, a hole that states will eventually have to fill with tax increases and spending cuts.

Funding Retiree Healthcare Plans

by Robert C. Pozen, Joshua D. Rauhvia Defining Ideas
Wednesday, August 19, 2015

New accounting rules won’t cure the budgetary ills of state and local governments. 

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