Investment in Education in Portugal: Returns and Heterogeneity

Education plays a key role in the modern economic and social development process. Sustainable economic growth in developed economies requires a population of workers, entrepreneurs and managers with high level of schooling. This is the only possible way to foster the creation and adoption of new ideas. Throughout the 20th century Portuguese economic growth was relatively constant, albeit more consistent after the 1950s. However, developments in education were quite irregular. During more than two thirds of the 20th century the median schooling level of the Portuguese population was just 4 years of schooling. Despite the progress seen in the past few decades, the educational structure in Portugal remains rather fragile compared with the other advanced economies. This acts as a binding constraint to the growth of the Portuguese economy in the present and in the future.