Overcoming the low skills profile in Portugal

A recent study on workers’ skills levels and education concludes that Portugal is in a low-skill situation. The country is an exception in an international context regarding the labour market demands of a knowledge-based economy. The study concludes that the continuing low-skilled profile of the economically active population, as well as the education system’s incapacity to halt an early dropout from school, are the country’s main limitations in this respect.

Background

In many countries, the fast transition to a knowledge-based economy has led to increasing inequalities in the labour market, notably the polarisation of high-skilled and low-skilled workers in terms of their access to training, employment and income. Over the past two decades, the pay gap between high-skilled and low-skilled workers has been increasing. Moreover, in some cases, the unemployment rate of low-skilled workers is over four times higher than that of individuals with a higher educational degree. This means that the benefits of education, qualification and certification have become even more important in the ‘knowledge society’.

About the study

In 2007, the Study Centre for Peoples and Cultures of Portuguese Expression (Centro de Estudos dos Povos e Culturas de Expressão Portuguesa) of the Catholic Portuguese University (Universidade Católica Portuguesa) carried out a study on the low qualification level in Portugal. The study aims to examine the issue of low skills in Portugal and to present proposals to prevent and remedy the prevalence of low-skilled workers in the country’s labour market. The latter group of workers still represent over 70% of the economically active population, according to 2007 data from Statistics Portugal (Instituto Nacional de Estatística).

Methodology

The study followed a forecasting method called M3E, which was designed to simulate the chronological evolution of the number of individuals leaving the education and training system and those continuing to study. The study was given a 25-year timeframe, covering the years 2000–2025. Low-skilled workers were defined in line with the International Standard Classification of Education (ISCED) as Level 2 group (ISCED 2) – that is, individuals who did not complete secondary school education.

Main findings

The findings revealed that skill levels in Portugal have been developing at a relatively slow pace since the end of the 1980s mainly due to:

  • the resistance of a production and entrepreneurial structure based on low skills;
  • a slow generational renewal of the labour market;
  • an early dropout from the education system;
  • very low investment in education, as well as in adults and vocational training.

International comparison

Globalisation, along with the intensification of international competition and technological changes in most economic sectors, have generated a bias in labour demand, resulting in a preference for highly-skilled rather than low-skilled workers. Nevertheless, several studies confirm the Portuguese ‘exception’ in this respect due to the following findings:

  • between 1985 and 1996, Portugal was the only country among those surveyed – France, Germany, the Netherlands, Portugal, Sweden and the United Kingdom – in which the demand for low-skilled workers (ISCED2) has not declined;
  • according to current trends, it will take over 10 years for Portugal to reduce the proportion of low-skilled workers to 10% of the economically active population;
  • Portugal will be the only country which will maintain a high proportion of low-skilled jobs in the labour-intensive services sectors, such as construction, retail trade, and hotels and restaurants.

Low-skill equilibrium

The study proposes lifelong learning as a solution for the critical and urgent need of upskilling the country’s labour force. It underlined, however, that Portugal appears to be in a situation of a ‘low-skill equilibrium’, in which investment in training is more likely to be compromised. In such a case, most companies adjust their business strategies to the low-skill profile of the available labour force. In other words, companies adopt strategies favouring low-quality products with a low added value. They continue to use standard technologies, and many of the jobs created are those types of occupations which require low qualifications and are low paid. With reduced labour market needs and low expectations about employment opportunities, pay and career perspectives, as well as the demand for training, remain at a low level, both for individual workers and companies.

Good company practices

Although the labour force continues to have a low-skilled profile and the education system is incapable of stopping the early dropout from school of more than one third of students in each generation, some good practice examples exist. These case examples demonstrate how companies can contribute to reducing the proportion of low-skilled workers.

For instance, a highly specialised textiles company, which was going through a process of labour renewal mainly due to an ageing workforce, intended to recruit young people looking for a first job who had a basic school education of nine years (ISCED 2). However, the company was not successful in recruiting people with this educational profile and thus lowered its educational requirements for the job to seven years of school education.

In order to overcome the lack of skills among the available labour force, the company devised an internal training programme in a partnership with a professional school. The aim was to train long-term unemployed people in the company’s facilities over a period of nine months, thereby offering a training programme comprising a total of 1,200 training hours. The initiative ran over two years from 2004 to 2006. At the end of the training programme, the company hired some of the trainees, while most of the remaining trainees were recruited by establishments in the surrounding area. The trainees obtained a training certificate, which some of them – those who wanted to – used to start a process of recognition, validation and certification of competences (RVCC) in the national system for adult education.

Reference and further information

Carneiro, R. (ed.), Valente, A.C., Fazendeiro, A., de Carvalho, L.X. and Abecasis, M., Baixas qualificações em Portugal [Low skills in Portugal], Cogitum Collection No. 29, Lisbon, Study Centre for Peoples and Cultures of Portuguese Expression, Ministry of Labour and Social Solidarity (Ministério do Trabalho e da Solidariedade Social, MTSS), 2007.

In 2007, the Portuguese government and the social partners approved the agreement for the reform of vocational training (PT0704029I).

Jorge Cabrita, Cesis

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