Joshua D. Rauh

Senior Fellow / Director of Research

Joshua D. Rauh is a senior fellow and Director of Research at the Hoover Institution and the Ormond Family Professor of Finance at Stanford’s 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, business taxation, government pension liabilities, and investment management. 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 Journal of Political Economy.

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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California Saving

by Joshua D. Rauhvia Hoover Digest
Friday, April 20, 2018

California can wake up from its public-pension nightmare. The key: getting rid of ruinous defined-benefit plans.

Featured CommentaryFeatured

Can California Save Itself From A Pension Disaster?

by Joshua D. Rauhvia Eureka
Thursday, January 25, 2018

The California Public Employees’ Retirement System (CalPERS) and other pension systems in the Golden State might be celebrating their recent investment returns, but don’t be fooled. Their problems are nowhere close to solved — and those problems are taxpayers’ problems.

FeaturedPension Pursuit

Kicking The Can: Concealing Budget Shortfalls By Underfunding Pensions

by Joshua D. Rauhvia
Thursday, November 2, 2017

Pension funds are using unrealistic assumptions about their future pension returns, concealing shortfalls that will eventually have to be paid for with benefit cuts or higher taxes. Politicians are promising generous pensions without adequately funding them, requiring risky investments. When investment returns don’t materialize, taxpayers have to cover the shortfall.

Pension PursuitFeatured

A Misalignment Of Interests: The Politics Of Pension Funding

by Joshua D. Rauhvia
Thursday, October 26, 2017

The unfunded obligations of pensions systems sponsored by state and local governments continue to grow as a result of unrealistic assumptions about investment returns in pension funds. States that say they’re running balanced budgets are concealing growing debt that crowds out much needed services and imposes higher taxes on current and future taxpayers.


Pension Pursuit

by Joshua D. Rauhvia
Friday, October 20, 2017

Play the game of Pension Pursuit and see how state and local governments are underfunding pension obligations by trillions of dollars. This five-part animated video series is based on Hoover Institution Senior Fellow Josh Rauh’s research on the vast underestimation of public pension liabilities and gives insight into the hidden debts the next generation will face.

Pension Pursuit

Off By Trillions: The Reality Of Our Pension Problem

by Joshua D. Rauhvia
Thursday, October 12, 2017

Pension funds are using overly optimistic assumptions about investment returns and should treat pension promises as guarantees that need to be backed up by risk-free investments. As a result, actual liabilities are three times higher than what is being reported by state and local pension funds. State and local governments need to change how they plan for future pension costs and set aside more money in order to prevent higher taxes or cuts to services taxpayers enjoy.

Pension Pursuit

Unfounded Optimism: High Investment Returns Are History

by Joshua D. Rauhvia
Thursday, October 12, 2017

Stocks and bonds used to have high rates of return, but those times are gone. Bond yields are much lower than they used to be and achieving high returns requires taking on more risk. When shortfalls happen, taxpayers are on the hook.

Pension Pursuit

Risky Business: Hoping High Returns Fund The Pension Gap

by Joshua D. Rauhvia
Thursday, October 12, 2017
In order to keep taxes low and prevent cuts to services, state politicians effectively borrow massive amounts of money from their pension systems and make risky investments to offset the budget shortfalls. They claim that there are no budget shortfalls as long as investment returns remain high. When investment returns don’t materialize, they turn to taxpayers to pick up the shortfall.

The Future Of (Partially) Funded Pension Systems

by Joshua D. Rauhvia Organisation for Economic Co-operation and Development
Wednesday, June 21, 2017

Hoover Institution fellow Josh Rauh gave a presentation to the OECD on "The Future Of (Partially) Funded Pension Systems" on June 21, 2017.

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Hidden Debt, Hidden Deficits: 2017 Edition

by Joshua D. Rauhvia Analysis
Monday, May 15, 2017

Hidden Debt, Hidden Deficits – a data-rich study by Hoover Institution Senior Fellow Joshua Rauh -- that calls attention to the fact that almost no state or local government is running a balanced budget, with the reality being that runaway pension costs are consuming state and local budgets. Building off last year’s 2016 report, this year’s study of 649 U.S. pension systems found that systems in 2015 realized average investment returns of only 2.87%, yet the average discount rate that they chose was 7.36%.  This differs from last year's report, where they realized higher average returns.