Beyond the Ivory Tower

"There was a lot about taxes, revenues, state versus federal, intergovernmental transfers. It's quite close to my subject of research today," says Poterba, who serves as president of the National Bureau of Economic Research. "We worked on the topic that whole year, taking both affirmative and negative positions so I learned a lot about associated issues like the regressivity of value-added tax and property tax. It certainly influenced my thinking."

By the time he graduated, Poterba's debate team was ranked one of the top in the country. The topic in his senior year involved allocation of scarce world resources. "You could not ask for a topic closer to the fundamentals of economics," says Poterba. "I guess the die was cast my freshman year."

That sense of right-place, right-time followed Poterba as he came up. At Harvard, he worked as an undergraduate research assistant for both Lawrence Summers and Martin Feldstein, notable economists interested in the tax system and its effect on households and corporations. When he began teaching at MIT in 1983, it was the early days of the 401(k) and the "IRA experience."

"Questions associated with tax rules on retirement savings were front and center," says Poterba. Then, in the early 1990s, the National Institute on Aging began sponsoring a biennial survey of households late in life, tracking people's health and economic circumstances. The survey results completely changed the way retirement research was done.

"This was transformational. The last two decades represent a revolution in the amount of high-quality information that's available about households in retirement," says Poterba, who is married to MIT economist Nancy Rose. "It's a data-rich environment. There's lots of numerical information to slice and dice. It's something I really enjoy—trying to think through how we tease information out of different data sets."

Milevsky, an associate professor of finance at York University and executive director of the non-profit IFID Centre in Toronto, calls Poterba one of the world's leading scholars in the field of public economics.

"He is a known guru on all aspects of taxation policy and how it impacts the economy. He is not only an academic theoretician, he has actually served on a number of presidential-level committees to investigate these things in the real world," says Milevsky. "If you want somebody to help you think through the tax implications of almost anything in economics, he is your man."

Poterba, meantime, continues to diligently follow where the research takes him.

"The work I've been associated with has shown up in many contexts—in public policy discussions and in private," he says. "But there's no Jim's plan or Jim's rule. It's simply following the thread."