In Portugal, private returns to the investment in formal education are estimated to increase with educational attainment and to be higher in the case of women. The returns to schooling increased in the late-1980s and the 1990s, especially as regards tertiary education. This occurred in parallel with an expansion of the pool of workers holding university degrees, suggesting it was surpassed by a rise in the demand for skilled labour. 

However, in the most recent period the magnitude of the returns to tertiary education declined, in particular for the youngest workers. This evolution may have been partly driven by the drop in the number of years required to complete a Bachelor degree. In any case, in Portugal, tertiary education remains a profitable investment for individual agents. The returns to university education estimated using 2016 data are more than 40% higher than those referring to secondary education. Policy makers must take this into account when designing policies and incentive schemes.

For additional detail, see Maria M. Campos and Hugo Reis, “Is it still worth investing in education?”, in Portuguese Economic Growth: A View on Structural Features, Blockages and Reforms, Economics and Research Department, Banco de Portugal, October 2019.  

Prepared by Maria Manuel Campos and Hugo Reis. The analyses, opinions and findings expressed above are those of the authors and not necessarily those of Banco de Portugal or the Eurosystem.

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