Will College Pay Off? A Guide to the Most Important Financial Decision You’ll Ever Make. By Peter Cappelli. Public Affairs, $25.99.

By Eric Johnson

For many years, asking Will College Pay Off? would have seemed ridiculous. The value of higher education was clear, compelling, and mostly undisputed.

But with tuition rising and economic conditions shifting, Peter Cappelli’s book-length treatment of that question is timely and necessary. Policymakers from Bernie Sanders to Scott Walker have bemoaned college costs and student debt, and the slow recovery from the Great Recession has created new career anxieties for students and parents.

So where does Cappelli, a widely respected labor economist and professor at the Wharton School of Business, come down? Is college worth it?

“It depends,” is the short, frustrating, and accurate answer. “Whether going to college pays off is a complicated question because it has so many moving parts,” Cappelli writes. He details some of the factors that frustrate a simple cost-benefit analysis for higher education:

“College” can mean a lot of different things. Higher education can mean a four-year program at an expensive private university, or it can be an affordable, industry-focused associate degree from a community college. It can be residential, part-time, or entirely online. It can come from a public university, a private college, or a for-profit program. All of these factors make a huge difference in both the up-front cost and the long-run payoff. Because public universities generally cost far less than comparable private or for-profit schools, the payoff is often better.

Going to college and graduating from college are very different. The most important thing you can do to increase the value of college is to finish. The students who are worst-off in terms of debt burden and ability to pay are those who leave school without earning a degree. “Although we tend not to think about it often enough, the biggest cost of college comes if a student drops out.” Cappelli notes.

We’re really bad at predicting the job market of the future. We know that college graduates generally earn more than non-graduates, and we know that college grads have much lower rates of unemployment. But we have very little idea what the labor market will look like over the course of our lifetimes, so there are no guarantees. “The baby boomers among us will remember when the standard advice for career success was to get a job with a big company because it would take care of you,” Cappelli writes. “How well did that work out?”

People aren’t widgets, and labor markets aren’t very efficient. “People are complex, as are the requirements for most jobs, and education is only a small part of the requirements of any job and of the attributes of any one person,” Cappelli writes. A specialized degree may seem like a good bet when a particular field is in demand, but labor markets can shift quickly. Most employers look for skills and experiences that are adaptable.

Given these caveats, Cappelli thinks that policymakers and the public need to be far more circumspect in talking about college as an economic cure-all. While the payoff for high-quality, low-cost degrees can be enormous, the cost to families who pursue less appealing options — like high-risk for-profit schools or narrowly tailored programs with limited job prospects — can be steep.

Better public funding of state colleges and universities would make higher education less risky for individual students, Cappelli notes. The falloff in public support has played a major role in driving up the cost for students.

“The reason costs have gone up so much as well as the explanation as to where they have gone up has to do with politics, specifically the willingness of taxpayers and their representatives to support college education,” Cappelli writes.

That has left students and parents shouldering more of the cost and more of the risk. Cappelli suggests that if college is a public good, we should be willing to pay for it. If it is a private investment, he says, then we should enact more consumer protection for students and families weighing these very complex decisions.

(Will College Pay Off? was also reviewed in last week’s issue of The New Yorker.)