From 1960 to 1973, Portuguese policy measures supported a shift of resources, including labor, from low-productivity toward high-productivity uses, especially export-oriented industries. Rapid and accelerated economic growth was reflected in the profound alteration of the sectoral composition of the work force. Between 1960 (the year after Portugal became a charter member of EFTA) and 1973, the share of the civilian labor force engaged in agriculture, forestry, and fishing fell from nearly 44 percent to just under 28 percent, whereas the share of labor engaged in industry (including construction) increased from slightly less than 29 percent to almost 36 percent, and in the services sector (including transport and communications) from nearly 28 percent to slightly more than 36 percent. The shift of labor out of agriculture involved a reduction of the number engaged in that sector (a decline of about 550,000 workers between 1960 and 1973), as well as in the proportion of farmers in the total labor force.

Because of heavy emigration, the working population of continental Portugal shrank from more than 3.1 million in 1960 to just only 2.9 million in 1973, and employment fell by an annual rate averaging 0.5 percent. The rapid shrinkage in the number of workers in agriculture was not accompanied by an equal or greater rise in the industrial and services sectors. Nearly two out of every three Portuguese taking up nonagricultural employment during this period did so in another West European country. France was, even at the beginning of the 1990s, host to about 80 percent of the emigrant workers, most of whom worked at unskilled or semi-skilled jobs. The 110,000 Portuguese in Germany, by contrast, had found higher-skilled work, with some two-thirds employed in industry in 1977. Consequently, net emigration between 1960 and 1973 exceeded 1 million, a number greater than the natural increase in the Portuguese population. In the thirteen years of war, from 1961 to 1974, 1.5 million Portuguese had seen military service in Africa, and during 1974 one in every four adult males was in the armed forces. During this period, unemployment was kept down to about 4 percent (and to less than 3 percent in the early 1970s), largely because of massive labor emigration to industrialized Western Europe and the military draft.

After the revolution, the demobilization of the military draftees and the return of Portuguese nationals from Africa produced important additions to the mainland population and labor force. From a combined strength of 220,000 at the beginning of 1974, the armed forces demobilized some 95,000 persons in that year and 60,000 in 1975. Furthermore, an estimated 500,000 returnees (retornados) were repatriated, mainly from Angola and Mozambique, and most of them were totally without resources, having had to leave the former colonies with only the barest essentials. Initially, their former occupations made them difficult to integrate into the metropolitan economy: 67 percent had held service jobs (as public employees or office workers), whereas oacd only 20 percent had been engaged in industry, and 4 percent in agriculture. Consequently, the Portuguese government had to shoulder an extremely heavy burden in the form of the various benefits granted to the returnees, including cash subsidies, provision of hotel accommodations, and assistance with purchases of essential goods. The sum of these benefits was estimated at 14 billion escudos (for value of the escudo--see Glossary) in 1976, or about 11 percent of total government spending. In all, the increase in the civilian population from 1974 to 1976 was probably about 900,000, i.e., 10 percent of the total population in 1973.

Following this brief population burst in the number of mainland residents, Portugal's population and labor force resumed their natural rates of growth for example, in the 1980-89 decade, the annual percentage increases were 0.5 percent and 1.4 percent, respectively. Between 1973 and 1990, Portugal's labor force grew by more than 1.8 million (see table 6, Appendix), of which more than half was absorbed in the services sector and over a third in the industrial sector. Although the share of the work force in agriculture, forestry, and fishing resumed its historical relative decline (from nearly 28 percent of the total in 1973 to almost 18 percent in 1990), the absolute number of workers in that sector increased slightly. Industry's share in the labor force remained virtually unchanged between 1973 and 1990 (at about 35 percent), but the services sector nearly added 1.2 million employees, its share in the total rising from over 36 percent in 1973 to 47.4 percent in 1990. A major explanation for this growth of almost 11 percent was the explosive increase of civil service employment after the Revolution of 1974.

Data as of January 1993