Executive Summary

Enrolment in higher education in Portugal reached its highest ever level in 2020/21, when almost 412 000 students were enrolled in one of the country’s 106 higher education institutions (HEIs). Over 80% of these students were enrolled in public universities and polytechnics, with just over 50% in public university programmes and around 30% in public polytechnic programmes. The higher education attainment rate among those aged between 30 and 34 in Portugal increased by 16 percentage points between 2012 and 2021 – from just under 28% to almost 44% – and is now above the average of the 27 European Union (EU) member states. Recent higher education graduates in Portugal are more likely to be employed and earn, on average, around 50% more than their peers without tertiary qualifications. While employment in knowledge-intensive services and high-technology manufacturing in Portugal is lower than in many other OECD countries, employment in skills-intensive sectors is forecast to grow strongly in the coming decade.

Despite its considerable successes, Portugal’s higher education system faces challenges. The population of Portugal is ageing at a faster pace than populations in most OECD countries. The population aged 20-29 that constitutes the bulk of current demand for higher education is projected to decrease in Portugal by 13.5% between 2020 and 2035, with the greatest decreases (of up to one-third) in Alentejo, the North Region (Norte) and Madeira. This contrasts with a projected 10% growth in this age cohort in the Lisbon metropolitan area in the same period. While public universities generally fill more than the basic number of regulated study places they have available, student demand for places in public polytechnics is more variable, with some institutions, particularly in Alentejo and the Central Region (Centro) already struggling to attract students. These demographic trends will inevitably require the higher education system to adapt.

Total spending on public higher education institutions in Portugal in 2018 was the equivalent of 0.9% of the nation’s Gross Domestic Product (GDP), compared to an average in OECD countries of 1.1%. On average, around 70% of total income in public universities and 80% in public polytechnics comes from public sources. Following the significant public funding reductions implemented after the 2008 financial crisis, total core funding from the state budget for public HEIs in Portugal increased by 15% in nominal terms between 2017 and 2021. However, the decision not to apply a formula-based allocation process from 2009 onwards has led to core-funding allocations to individual institutions becoming progressively misaligned with real enrolment levels.

This OECD review has analysed the way in which core public funding for day-to-day operations is allocated to public higher education institutions in Portugal, the way in which public funds are used to support the strategic development of the higher education system and the use of public resources to promote the accessibility of higher education. The review has drawn on national and international evidence and data sources, as well as extensive consultations with higher education institutions and stakeholders in Portugal. The table overleaf summarises the main findings and the policy recommendations to Portugal in these areas that have resulted from the review.


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