Tue, 25 Feb 2025

Tue, 25 Feb 2025 Countries compete to keep skilled young workers

EU nations hope that tax benefits might encourage young, skilled workers to stay, but will they work?
A software engineer who moved from Portugal to Ireland and now works in the US says that despite the financial benefits of working abroad, he still plans to return to Lisbon in two years with "many more savings". The Portuguese government has introduced a programme of tax reductions for workers under 35, which is set to benefit up to 400,000 workers. However, experts say it may not be enough to keep young professionals from leaving the country. Portugal's tax wedge - the ratio between taxes paid by an average worker and total labour cost for the employer - stands at 42.3%, one of the highest in the OECD. This means that even with the new tax incentives, workers may still find it more financially advantageous to work abroad. Specialists say that Portugal needs to address its low salaries and lack of professional opportunities to keep young professionals from leaving the country. One software engineer who left Portugal during the pandemic for a job in Berlin said that he wouldn't consider returning unless his family was affected. Experts also warn that the emigration problem is not unique to Portugal, with many European countries facing similar challenges.
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