In recent years, a growing concern has emerged in several countries, especially within Europe, regarding the brain drain of skilled young workers. As advancements in technology and globalization create opportunities abroad, nations like Portugal, Poland, and others are increasingly devising strategies to retain their talented youth. Amid this landscape, individuals like Duarte Dias, a Portuguese software engineer, provide valuable insight into the motivations and realities that lead to their migration.
Duarte Dias’s journey began in 2020 when he accepted a position at Microsoft’s Dublin branch after completing his education at Instituto Superior Técnico in Lisbon. His pursuit of a more prosperous career quickly led him to Microsoft’s headquarters in Seattle, USA, within a year. Despite his nostalgia for the Portuguese way of life and the close-knit work environments back home, Dias has no regrets about seeking an international career. His financial calculations made it clear that staying in Portugal would have resulted in limited growth. After assessing potential savings and costs, he realized that even a well-paying local engineering job wouldn’t facilitate a comfortable lifestyle. His modest salary of €35,000 (approximately $36,000) in Portugal, subject to high tax rates, would leave him with far less than what he now earns in the United States, exceeding $160,000 with lower taxation.
The plight of young workers like Dias prompted the Portuguese government, led at the time by the Socialist Party’s Antonio Costa, to initiate tax relief programs aimed at retaining young talent. An example of this effort was the IRS Jovem program, introduced in 2020, designed to provide tax reductions for individuals under 30, which saw participation from over 73,000 taxpayers by 2022. However, recent elections have led to policy modifications under the new centre-right government, led by Luis Montenegro, which expanded the program to benefit even more workers and extended the duration of these tax incentives.
Despite these measures, experts remain skeptical that such initiatives will significantly counteract the trend of young professionals seeking opportunities abroad. Sérgio Vasques, a tax law professor at the Católica Lisbon School of Law, expressed doubts about the effectiveness of tax relief as a standalone solution. He pointed out that the existing tax burden in Portugal, where the tax wedge stands at an alarming 42.3%, disincentivizes skilled labor. This high percentage places Portugal within the top rankings among OECD countries concerning tax burdens, posing a further challenge in retaining its young talents.
Furthermore, the issue of young emigration is not limited to Portugal. Rita de La Feria from the University of Leeds indicates that many European countries face similar challenges regarding the migration of educated young individuals. In fact, as of July, special tax regimes for younger taxpayers were noted not only in Portugal but also in Poland and Croatia, highlighting a broader European trend. The concern is that significant investment in training these young people often results in them relocating overseas shortly after entering the workforce, leaving their home countries unable to reap the benefits of their educational expenditures.
Meanwhile, the experiences of other young professionals, such as Antonio Almeida, a software engineer who relocated from Lisbon to Berlin and then Brussels, illustrate the difficulties faced by the Portuguese workforce. With initial job offers in Portugal at around €1,300, Almeida opted for positions offering substantially higher salaries abroad. Even high taxes in Germany could not negate the attractive net income from these roles, underscoring Portugal’s challenge of offering competitive salaries.
In conclusion, while countries like Portugal are actively seeking solutions to retain their skilled youth, individual experiences reflect a more intricate reality. Higher salaries and better work conditions abroad continue to serve as powerful incentives for talented young professionals. Despite governmental attempts to implement policies to keep these individuals in place, the prevailing truth is that financial outlooks, career growth, and life quality continue to dominate the decision-making processes. Ultimately, transitional policies may need to be enhanced or expanded considerably if countries like Portugal wish to mitigate the loss of their future workforce effectively.
