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John B. Shoven, a king of retirement economics, retires

May 24 2019

John B. Shoven, the Charles R. Schwab Professor of Economics, is retiring after nearly 50 years of service at Stanford.

All photos by Holly Hernandez

John B. Shoven has been a dean, a director and a chair. He’s been a consultant, an adviser and a mentor. And now, at 72, the Stanford economist well known for urging Americans to postpone collecting Social Security benefits for as long as possible is taking on a new title: professor, emeritus.

That’s right. The eminent economic evangelist for the benefits of working longer is officially retiring.

His influence, however, will be working overtime.

Shoven’s extensive contributions span from shaping tax policies to fostering new generations of economic experts. He has been influential in applied general equilibrium economics and in combining economics with public finance and corporate finance. He has also been at the frontier of the economics of aging — pioneering research and collaborating with others in analyzing what would become critical issues around Social Security and pensions funds.

“John has had a real direct — as well as indirect — influence on economic policy through his writing and his teaching,” says Michael Boskin, the Tully M. Friedman Professor of Economics. “He’s been an outstanding colleague, an outstanding department chair, an outstanding dean, and a tremendous director of SIEPR. Virtually everything he’s touched has turned out really well.”

In nearly five decades of service at Stanford, Shoven mastered the juggle of research, teaching, administration and fundraising — and infused it all with a sense of humor and down-to-earth, personable approach. He took on time-consuming and challenging leadership roles that many scholars would shy away from or look to relinquish sooner than later.

Shoven, the Charles R. Schwab Professor of Economics, joined the faculty at Stanford in 1973 after getting his masters and doctoral degrees in economics at Yale. His leadership roles at Stanford followed one after another, starting in 1979 as vice chairman of the Department of Economics, then as department chair from 1986-1989.

He then served four years as director of the Stanford Institute for Economic Policy Research (SIEPR), followed by five years as dean of the School of Humanities and Sciences, Stanford’s largest school. Shoven returned to the helm of SIEPR in 1999, leading the institute for another 16 years.

“John has been willing to take on these leadership roles, devoting full-time energy and attention to them, while at the same time insisting that his research trajectory had to continue. This is in contrast to many academics,” says Gavin Wright, the William Robertson Coe Professor of American Economic History, Emeritus.

Shoven has published more than 135 articles and 20 books. He also has served as a consultant to the Federal Reserve Board of Governors, the government of Portugal, the U.S. Department of Treasury and the Council of Economic Advisors.

Much of his work has focused on understanding the impacts and benefits of retirement savings and pension systems. His 2019 published article entitled “The Power of Working Longer” concluded that delaying retirement by three to six months has the same impact on one’s standard of living as saving an extra one percentage point of wages for three decades.

With an unwavering passion for teaching, Shoven has stayed in the classroom and advised undergraduate and graduate students throughout his career. He won the Dean’s Award for Distinguished Teaching in 2003, but his deep gratification, Shoven says, comes from ongoing interactions with students — those from decades ago to current ones.

“If you’re not about students, then why are you at Stanford?” Shoven says, repeating the words that he took to heart from John Gunn, the philanthropist whose name — along with the name of his wife, Cynthia Fry Gunn — is on the SIEPR building that opened on Galvez Street in 2010.

Never mind Jupiter. Let’s tackle our world

Shoven, who grew up in Southern California, received his bachelor’s degree in physics at the University of California, San Diego in 1969. But he discovered a different calling as he minored in economics and math.

“As an undergrad, I was working at a space science lab, working on things like the shape of the magnetosphere around Jupiter,” Shoven says. “And I thought: Who cares about the magnetic fields around Jupiter?”

Meanwhile, the American economy was struggling.

“We had a bad combination of inflation and a stagnant economy — something called stagflation,” he says. “We had a budget deficit, and the Vietnam War was not funded appropriately. So, I thought, those were things to work on. Those were problems people could relate to.”

Shoven was also attracted to economics for its potential to deliver an impact on an issue within a relatively short time frame — which is in contrast to physical scientists who sometimes spend entire careers specializing on a single challenge.

At a 65th birthday, academic event for Shoven, MIT economist James Poterba aptly described how Shoven has “an unerring instinct for finding the key topics of the day” and is “a perennial source of interesting ideas, new insights and fun.”

During the 1970s and 80s, Shoven and economist John Whalley developed a mathematical model to analyze the effects of tax policy changes. Their Shoven-Whalley model — the result of some 10 years of work — was implemented by the U.S. Treasury Department during a heavy period of tax reforms. The framework is considered an intellectual ancestor of other models used today in a variety of economic fields.

His research in corporate finance shed light on the interplay between inflation and corporate behavior as well as on the increasing usage of share repurchases, leading to changes in tax policy for dividends.

As a leading economist on Social Security, Medicare and pension issues, Shoven is often called on to weigh in on the debates continuing today over those entitlement programs.

He says one of his most rewarding experiences came when his research with David Wise led to the 1997 repeal of a decade-old tax provision. Their paper, which garnered widespread attention, had revealed that tax payments on pension payouts could amount to more than 90 percent of the pension itself.

Shoven’s conviction underlies his own work and enthusiastic support for others’: “Policies can be wasteful and have unintended consequences,“ he says. “And if you can point that out and change policy, it’s very satisfying.”

Doubling-down on economic policy research

Shoven is widely credited with the tremendous growth of SIEPR — from a small operation housed within Stanford’s economics department in its early years to today’s renowned institute that draws academic visitors from around the globe and supports economic policy research for more than 100 scholars in multiple disciplines across Stanford’s seven schools.

“Many people were involved, but I'd say that John was the most important and the most influential in building SIEPR to what it is now,” says Boskin, who helped launch SIEPR in 1982. “And it’s exceeded expectations.”

Even when the university had other construction priorities in place and wouldn’t help fund a proposed new building for SIEPR, Shoven dared to take on the unprecedented challenge of pursuing a fully donor-funded project.

“He said, ‘Try me,’ when the university told him he would have to raise all the money within six months if he wanted to construct a building,” recalls Gregory Rosston, who served alongside Shoven as SIEPR’s deputy director for about 15 years. “Shoven doesn’t take ‘no’ for an answer. When he wants to get things done, he figures out how to align people’s interests to get things done.”

John B. Shoven meets with economics student Genevieve Selden, '19, to discuss her senior thesis.

At that time, some people were also unsure how much support could be garnered to sustain a large research institute focused on economic policy. But Shoven reached out and made many connections beyond Stanford’s community, drawing their interest.

As SIEPR’s longest-running director, Shoven was a pivotal, inspirational leader with the foresight to see the institute’s potential and the role it could play in shaping policy to help improve lives, says Gopi Shah Goda, SIEPR’s current deputy director.

“It takes someone with John’s ability to look ahead to be able to ensure that SIEPR will continue to add value to the university, the faculty and the students,” she says.

Goda herself was a student of Shoven’s. Her interest in public finance was sparked by his class, then solidified by his subsequent research assistance opportunities. Goda later became one of his frequent collaborators and joined SIEPR when then-director Shoven asked her to kick-start the institute’s Young Scholars Program. The program is now modeled by other universities.

Shoven anchored a vision that endures at SIEPR to this day. In addition to accumulating an impressive roster of expert researchers, SIEPR cultivates new thinking and new insights by attracting a steady influx of visiting professors, supporting aspiring economists and inspiring young students with the lure of using economics as a catalyst for change.

During a recent interview, Shoven notes a proof point: His office at SIEPR this past year was flanked by those occupied by rising stars in economics — on one side by an MIT associate professor who was named a MacArthur fellow, and on the other side by a postdoctoral fellow who will soon be teaching at Northwestern University to continue her work in health and labor economics.

As its director, Shoven also made sure that SIEPR remained nonpartisan, or that it be “open to all partisans” as he puts it. “I didn’t want it to be left-leaning or right-leaning. From the start, I was interested in economic policy, not politics,” he says.

Mark Duggan, who became the Trione Director of SIEPR when Shoven stepped down in 2015, credits his predecessor with putting Stanford at the forefront of economic policy research.

“John built SIEPR into a powerhouse where you have academics from Stanford and other leading universities developing close relationships with policymakers and business leaders,” Duggan says. “Those relationships have allowed for important collaborations and insights that push economic policy-relevant research agendas forward.”

A leadership style like no other

You won’t find Shoven named in any business leadership books, Rosston says. Yet his ability to inspire, lead and accomplish goals is undeniable.

“John just has terrific interpersonal skills; he’s extremely intelligent; and he wins over people,” says Lawrence Goulder, the Shuzo Nishihara Professor in Environmental and Resource Economics, a member of SIEPR’s steering committee and another of Shoven’s PhD students.

Even Shoven’s research papers exude a casual tone, carrying at times a conservational lilt, despite their deep, mathematical and analytical grounding.

“He is a master of exposition, explaining research accessibly to both professional and ordinary audiences,” Wright says.

Take his 2007 paper, “New Age Thinking: Alternative Ways of Measuring Age, Their Relationship to Labor Force Participation, Government Policies and GDP.” He begins it with, “This paper is not about what you think it is. It’s about how to measure age.”

The hallmark of Shoven’s leadership, many agree, is open, clear and honest communication. The basis of his decisions is always clear and ultimately convincing, even when unfavorable to some.

Shoven’s deanship coincided with the dot-com boom and a big shift in interest away from humanities and science majors such as biology and economics to computer science. Shoven had to make tough budget cuts.

Shoven also introduced a requirement that departments offer a minor in addition to a major — a horizon-expanding type of opportunity he had while at UCSD. And he instituted a mandated curriculum matrix of core courses for each department, eliminating a previous program of what he called “a sum of what teachers wanted to teach.”

As head of the economics department, Shoven initiated a practice that has now become common at other universities: After making offers to prospective graduate students, the department would host a campus visit to convince them to come to Stanford. “We had the advantage for a few years, but now everybody does it,” Shoven says.

The department’s musical skits in the spring are also a tradition, thanks to Shoven, who wasn’t afraid to dress up on stage in pajamas.

The flame keeps burning

Shoven has 40 hard-bound volumes on a bookshelf in his office — dissertations from PhD students he has advised. His own dissertation on “General Equilibrium with Taxes,” completed at Yale in 1973, is the bookend.

He is proud that his advisees have gone on to work in academia, policy and business, including roles as executives, Federal Reserve Bank governors, and Treasury officials.

Shoven’s impact extends also to high school students across America. Along with Wright and Don Hill, Shoven launched the annual Summer Economic Institute for Teachers in 1987 as a five-day retreat for high school teachers to hear about the latest economic research first-hand and invigorate their classroom teaching.

Today, Shoven remains as committed as ever to relevant policy challenges. As for that thing called retirement? Shoven says it’ll just be an official way of scaling back some of his work and teaching.

He plans to continue as the organizer of Stanford’s annual Working Longer and Retirement Conference, and to co-teach a course with Rosston on the economic policies of the presidential candidates in 2020, similar to their popular offering during the 2016 presidential election year.

Shoven and Boskin — who have jointly taught a variety of public finance courses since Boskin advocated for the young Shoven to come to Stanford — may also introduce a new course on financial decision-making for undergraduates.

Shoven’s legacy of students — or, as he would sometimes refer to as “his children”— will keep growing.

“I’m really thankful for this environment that I’ve been able to work in — that includes colleagues, staff and students. It’s been perfect for me,” Shoven says. “I could imagine working as hard as I worked and not having much success if I were in a different environment.”

And it’s an environment he isn’t about to quit.

“I enjoy what I do, so why would I change? If they're willing to let me keep doing much of what I was doing, I'll keep doing it,” he says with a smile.

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