Higher education and youth employment in Portugal: trends, outcomes and international comparisons

In the last 25 years, the percentage of young graduates (aged between 25 and 34) has quadrupled, going from 11% in the late 1990s to 43% in 2024. This increase has brought the country closer to the European average, which stands at 44%.

Although one of the largest educational gaps between Portugal and the European Union is gradually closing, Portugal still lags behind important neighbours, like Spain and France – where 53% of young adults have a university education – and Ireland, where the figure is 65%.

When it comes to funding, Portugal is one of the countries that is found wanting. On the one hand, the costs associated with the running of higher education institutions, in average terms per student, are 35% lower than the EU average. On the other hand, Portuguese families pay 30% of the costs involved, compared to only 13% in the EU.

Are education tracks in line with student aspirations and with the transition to higher education? How does Portugal compare with other European countries? How big are the salary differences within each level of education?

The new FFMS policy paper, by Luís Catela Nunes (coordinator), Pedro Reis and Teresa Thomas, researchers at the Nova SBE Economics and Education Centre, analyses the transition from secondary to tertiary education and its effects on employment and on salaries. The study also compares international costs and benefits, discussing funding models and making recommendations for public policies to reinforce equity of access to the system and its sustainability.

Below are the main conclusions of the policy paper:

• Bachelor’s degrees are still the most common qualification (58%), with Master's degrees in second place (33%) and PhDs remaining stable at 3%.
• Of the pupils on general track (science and humanities) courses in secondary school, 76% go on to tertiary education. Only 22% of pupils in vocational education move on to university.
• Those who complete their Master's degree achieve employment rates of 88% within one to two years and 93% after five years, in line with the EU average. The employment rate is lower (75%) for graduates with a Bachelor’s degree, but the rates begin to converge after five years.
• Recent graduates from vocational education have a higher initial employment rate than graduates from general track courses (72% vs 56%).
• A comparison of these with workers who have only completed secondary school, shows that graduates earn an average of 28% more and those with Master’s degrees earn 49% more.
• Despite the costs being low in absolute terms, direct costs as a percentage of GDP per capita in Portugal are high in comparison to the majority of European countries.

The authors make several recommendation for responding to the main challenges and for aligning higher education with future needs:

• Adjusting public funding to the individual and social benefits of higher education.
• Sufficient funding so that scholarships can respond to liquidity constraints and the initial costs faced by low-income students.
• Assurance that any fee reviews are accompanied by financial support aimed at the most vulnerable students, thus safeguarding against the risk of exclusion.
• Assessment of the feasibility of a loan system indexed to income.
• More flexible and prospective academic strategies, in line with future skills requirements.
• Setting up a national statistics system that incorporates data on education and on the labour market.
• Strengthening career guidance based on data collected from the very start of a student's academic journey.