José Ferreira Machado, dean of the Nova School of Business and Economics in Lisbon, calls it “the disappointment effect” – the idea generated by high levels of youth unemployment that there is no point in going to university since a degree is no guarantee of a job.
He fears this could happen in Portugal, where the jobless rate among under-25s remains above 33 per cent and is only slowly coming down as the country inches out of recession. The economic crisis saw youth unemployment reach 41 per cent in early 2013, sparking a wave of emigration by young jobseekers.
“A downward spiral like that would be very dangerous for Portugal and is based on a false assumption. The job market is tougher, but going to university still gives you a much better chance of finding work.”
Masters in management (MiM) students at Nova are keenly aware of the financial pressures caused by Portugal’s worst economic crisis in 40 years. “I really feel the country is losing some of its potential,” says Rita Almeida, 21. “Portugal offers little [financial] support for people who want to continue studying but don’t have the resources.”
Scholarships have become an important lifeline. “They help to finance an education for many students facing hardships who would otherwise have to give up or postpone studying,” says João Teodoro Guerreiro, 21, a scholarship student taking an MSc in economics at the Cátolica-Lisbon School of Business and Economics.
In a country that has no student loan system, except for the lowest income families, the cost of higher education can be a demanding commitment. “Not many Portuguese families want to take the risk of getting into debt, especially when the future looks so uncertain,” says Almeida.
At about €1,000 a year, state undergraduate tuition fees are low by north European standards. Within Portugal however, fees for masters programmes at state schools such as Nova are closer to the higher levels charged by private institutions such as Católica. “Without the support of a scholarship I’d probably be out looking for a job”, says Vitorino Oliveira, 23, a MiM student at Nova. “Even so, my family has to make a big financial effort to support me.”
Martin Engels, 25, a German studying for a masters in international management at Nova, part of the global alliance of 27 business schools that provide the Cems MiM degree, has seen how financial pressures can effect his Portuguese colleagues. “On a German salary, I could easily pay back the cost of my course here within a year,” he says. “But I’d have to think twice about taking out a loan if I was going to work in Portugal.”
In a tough job market, many students believe good qualifications are essential to stand out from the pack. “When you have 300 people applying for the same job, you need to be better than the rest,” says Rui Calvo, 22, a masters in business administration student at Católica. “Being a student during a crisis is the most powerful incentive to study and work hard.”
Francisco Veloso, dean of the Católica school, has noticed the extra effort. “Students are now very strongly committed and have thought hard about their options,” he says.
Students increasingly see a master’s degree as a basic requirement, especially since the Bologna Accord cut the length of most undergraduate degrees in Portugal from four or five years to three. “I didn’t feel properly qualified for a job after my undergraduate course,” says José Miguel Filipe, a MiM student at Nova. “My family felt studying for a master’s was an investment we had to make.”
Portugal’s top three business schools – Católica, Nova and the Porto Business School (PBS) – all boast impressive employment records. But students say the “brand recognition” provided by a school with a good reputation is more important to them than whether they are guaranteed work within three months of leaving.
Business schools also have a role to play in helping people adapt and in fostering entrepreneurship. “One of the few positive consequences of the crisis is that people are becoming less risk-averse, more willing to leave their comfort zone,” says Nuno de Sousa Pereira, dean of PBS. “More students now want to start up their own businesses – that wasn’t happening five or 10 years ago.”
As Zih-Siang Syu, 26, a Taiwanese MBA student at PBS puts it: “You have to know how to do business in good times, but learning how to survive in bad times might be more important.”