Portugal’s biggest export? – Portugal Resident

In the years since, the government has executed a series of fiscal measures in an attempt to retain its youth. So why, just over halfway through 2026, do we still find ourselves in a similar, if not identical, situation?

Before we look at the efficacy of the measures introduced, we must first understand the reason behind why they were introduced in the first place. In 2025, a revealing study titled “Brain Drain: Um estudo da intenção de migração dos jovens portugueses qualificados” was published by the Universidade de Lisboa (ISEG). Researcher Maria Inês Nunes Matado questioned 240 qualified, talented young Portuguese individuals regarding their motivations and desires to move abroad.

The findings regarding the timeline of migration were particularly illuminating. Of the 240 respondents, 160 claimed their interest in temporary migration (defined as less than or equal to three years) was high to very high. In contrast, interest in permanent migration was significantly less; only 70 out of the 240 claimed a high or very high interest in leaving forever.

Despite this study focusing on a relatively small group, it is deeply reflective of the current mindset of Portugal’s younger generations, a demographic I currently find myself in. It has increasingly become the status quo to assume that a stint working or studying abroad is a mandatory step in a modern-day Portuguese career. Yet, despite all the benefits that international experience brings, there is almost always an underlying desire to remain in or return to Portugal.

Young professionals want to stay or return for the exact same reasons that draw so many expats/immigrants to move here in the first place: the safety, the culture, the climate, and the overall quality of life. The desire to build a life here is mutual; the only difference is whether the local economy structurally allows young workers on local wages to do so. Yet, desire alone cannot pay the rent.

The ISEG study explicitly highlights that while subjective factors like seeking “new experiences” shape the initial itch to travel, the ultimate deciding forces are structural and economic “push-pull” factors. Specifically, the massive wage gaps and skyrocketing housing costs, compared to top destination countries like Switzerland, the UK, and Germany, all of which offer higher purchasing power.

In response to this, the government introduced the IRS Jovem scheme, a flagship policy offering a multi-year, progressive income tax break for young workers under 35. The logic was simple: lower taxes mean higher take-home pay and purchasing power, which theoretically bridges the wage gap.

However, this policy creates a fundamental mismatch with the reality exposed in the 2025 data. If young people primarily view emigration as a temporary three-year stepping stone, to gain capital and experience, a tax break back home does very little to solve the immediate problem. A 0% income tax rate is meaningless if the domestic base salary remains structurally low, and it does not help a young professionals secure an affordable apartment in a hyper-inflated rental market in Lisbon or Porto.

Portugal continues to bear the high cost of educating world-class engineers, doctors, scientists etc… only to export their most productive, early career years to wealthier northern European nations.

In conclusion, while the IRS Jovem is undoubtedly a step in the right direction, offering younger workers greater financial dexterity and making a domestic career seem visually more appealing, it ultimately fails to address the underlying issues prompting the exodus of young professionals.

Chief among these is the severely limited purchasing power allowed by a domestic wage. This is not a standalone problem, but rather the consequence of both internal and external economic pressures, such as: a skyrocketing cost of living, structurally low base salaries, a severe housing crisis, and low entrepreneurial incentives.

Consequently, the future for Portugal’s young professionals remains obscure. As talent continues to flow outward, the imminent threat of a rapidly aging population, with all its implied fiscal and economic consequences, creeps ever closer. While the mainstream conversation around the country’s brain drain may have quieted down recently, it remains a critical structural crisis well worth further exploration.