Preparing for Demographic Change in the Azores, Portugal

2. Setting the scene: Portrait of the Azores in its European and national context

Abstract

This chapter examines demographic, socio-economic and governance

trends in the Azores. Population decline and ageing have intensified, exacerbated by geographic isolation and insularity, with demographic patterns varying significantly across the nine islands. Tourism growth and pandemic-related immigration have temporarily offset outmigration, yet structural challenges persist. Economic vulnerabilities stem from reliance on the primary sector and public administration, with labour markets facing pressure from a shrinking workforce. Nevertheless, the archipelago possesses valuable natural and cultural assets, offering significant potential especially for sustainable tourism and renewable energy development. The Azores implements various policies within its autonomous governance framework to leverage these strengths and boost regional attractiveness.

Introduction

Demographic change, including depopulation and ageing, will affect most EU and OECD regions in the coming future. Without a proper response, these shifts may strain public finances as per capita costs for public services rise, particularly in rural areas. Skills and labour shortages may worsen, while inefficient land use could lead to vacant housing, deteriorating infrastructure, land degradation and higher per capita emissions. However, with proactive and strategic responses, these demographic shifts can create opportunities, such as for more affordable housing and enhanced environmental resilience through lower resource demands. Importantly, adapting to these challenges can improve regional attractiveness in a complementary way (Box 2.1).

The Azores archipelago lies 1 400 kilometres from mainland Portugal in the Atlantic Ocean, facing demographic challenges intensified by insularity. The population has declined and aged while the youth have migrated out of the region, though recent immigration linked to increased tourism, liberalisation of the airspace and COVID-19 has partly offset these trends. The Azores enjoys significant autonomy and EU support as one of Portugal's two Autonomous Regions and EU's nine Outermost Regions yet is challenged by complex governance structures that can complicate policy coordination and implementation.

Despite these difficulties, the Azores boasts valuable natural and cultural assets, including UNESCO biosphere reserves and World Heritage sites supporting tourism, distinctive agri-food products and potential for blue economy and renewable energy development. This report shows how policies must build upon these strengths to enhance regional attractiveness to retain and attract residents, particularly young people, while implementing adaptation strategies for sustainable service provision and infrastructure throughout the archipelago.

This report contains four main chapters. The current chapter presents demographic trends in the Autonomous Region of the Azores, outlining socio-economic characteristics, labour market impacts, current depopulation policies and governance structures. Chapter 3 examines how land use, spatial planning and housing markets can adapt to depopulation. Chapter 4 explores multi-level governance, public finance, infrastructure investment and implications of demographic trends. Chapter 5 addresses demographic impacts on transport, healthcare, education and childcare services. Chapters 3 to 5 offer tailored policy recommendations for each sector to address the Azores' demographic challenges.

Box 2.1. Helping regions adapt to demographic change

By 2050, two-thirds of EU regions are projected to have less population than in 2019, while nearly 9 of 10 regions are projected to have a higher median age. Population shrinking, ageing and outmigration of youth is negatively impacting many regions and risks leaving these places in a development trap.

Harnessing talent in Europe’s regions

In recognition of this challenge, the European Commission issued the Communication Harnessing Talent in Europe’s Regions (European Commission, 2023[1]) in January 2023. This Communication led to the establishment of the Talent Booster Mechanism (European Commission, 2025[2]) and the Harnessing Talent Platform (European Commission, 2025[3]), which aim to support regions facing a sharp decline in the working age population, a low and stagnating share of people with tertiary education and a significant departure of young people. These initiatives offer tailor-made, place-based and multi-dimensional solutions to support regions most affected by the demographic transition.

Figure 2.1. Overview of the Talent Booster Mechanism

Source: European Commission (2025[2]), Talent Booster Mechanism, https://ec.europa.eu/regional_policy/policy/communities-and-networks/harnessing-talent-platform/talent-booster-mechanism_en (accessed on  April 2025).

Smart adaptation of regions to the demographic transition

Pillar 2 of the Talent Booster Mechanism targets regions at risk of falling into a ‘talent development trap’, which are regions that have historically faced a high rate of departure of young people. Ten regions, including the Azores, were selected based on an open call to receive support to address their demographic challenges with a targeted study focusing on land use and spatial planning, multi-level governance, subnational government finance and public investment, and public service delivery.

Adapting to demographic change to remain attractive

Meeting the challenge of demographic change requires focusing on both adaptation and attractiveness. Adaptation strategies seek to ensure policies, governance structures and public services are aligned with a changing demographic structure. Attractiveness initiatives aim to address quality of life factors to create an attractive environment and opportunities for current and potential residents.

These approaches reinforce one another:

• Adapting land use to be more efficient can not only make public services easier and less costly to provide, but can also transform neighbourhoods into more attractive and lively environments that better serve current needs and attract residents and visitors.

• Adapting multi-level governance structures, public finances and investment in line with population changes can help to manage the fiscal pressures from population ageing and facilitate more efficient public services, creating fiscal space to support investments in attractiveness.

• Adapting public service delivery through digitalisation and mobile solutions, for example, can keep costs in check while also attracting younger populations and remote workers seeking residential mobility.

The necessity of adaptation thus becomes an opportunity to rethink and improve what makes places attractive and sustainable in the long-term.

Source: European Commission (2023[1]), Harnessing talent in Europe’s regions, link (accessed on  April  2025); European Commission (2025), Talent Booster Mechanism, link (accessed on  April 2025); European Commission (2025[3]), Harnessing Talent Platform, link (accessed on  April 2025).

Demographic trends

The Azores is an archipelago covering 2 355 km², comprising nine islands: Santa Maria, São Miguel, Terceira, São Jorge, Graciosa, Pico, Faial, Corvo and Flores. The distribution of the population across the islands is highly uneven. São Miguel, the largest island, accounts for nearly 140 000 inhabitants, representing more than half of the Azorean population. By contrast, the four smallest islands of Corvo, Flores, Graciosa and Santa Maria collectively represent less than 6% of the archipelago's inhabitants, with Corvo, the smallest island, having a population slightly above 400 (Figure 2.2).

Figure 2.2. Ponta Delgada accounts for a large share of the Azores’ population

Population distribution across municipalities in the Azores, 2023

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Population trends show stabilisation despite significant variation across municipalities

From 2010 to 2023 the Azores population declined by 2.7%, a trend shared with other Portuguese regions such as Alentejo, Madeira and Centro which saw even steeper decreases (Annex Figure 2.A.1). However, depopulation appears to have stabilised recently, with numbers reaching their lowest point in 2018-2019 (Figure 2.3). While population decline from 2011 to 2018 was primarily due to outmigration, since 2019 the population has grown by 1.3%, driven by immigration, while natural change has been increasingly negative. Factors driving recent immigration relate to airspace liberalisation, which allowed greater mobility from and to the mainland, growth in the tourism sector, and greater possibilities for remote working since the COVID-19 pandemic.

At a more granular level, population change across the islands and municipalities of the archipelago differs widely. The municipality of Nordeste on São Miguel Island lost 10% of its population from 2011 to 2023, while Madalena on Pico Island and Corvo Island both gained around 7% inhabitants (Figure 2.4). While natural change has been negative across most municipalities, the islands of Pico and Corvo both experienced strong immigration over this period compared to the other islands (Annex Figure 2.A.2 and Annex Figure 2.A.3). Meanwhile, the islands of São Jorge, Flores, and Graciosa experienced a stronger population decline of more than 5% over this same period.

Figure 2.3. Although natural change has been increasingly negative, immigration in recent years has helped to reverse depopulation in the Azores.

Yearly population change by component of change in the Azores from 2011 to 2023.

Note: Net apparent migration is defined as the difference between population change and natural change.

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Figure 2.4. Nordeste (São Miguel) lost 10% of its population from 2011 to 2023.

Population change by municipality from 2011 to 2023 in the Azores

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

The Azores is projected to lose close to one-third of its population by 2080

By 2060, population decline is projected in 14 OECD countries, with Portugal expected to lose nearly 11% of its population. Eurostat, in its population projections, defines a baseline scenario based on a set of assumptions on the future evolution of demographic components, including mortality, fertility and migration. Under this scenario, the population of the Azores is expected to further decline by 17% from 2025 to 2060, and by 29% from 2025 to 2080. Alentejo is expected to lose 36% of its population from 2025 to 2080. The Lisbon Metropolitan region, on the other hand, is expected to growth in population by 5% (Figure 2.5).

Figure 2.5. By 2080, the population of the Azores is expected to further decline by 29%

Population projections from 2025 to 2080 in Portuguese regions.

Source: Eurostat (2025), Population on 1st January by age, sex, type of projection and NUTS 3 region, link.

Ageing is compounding with population decline

Overall population decline has been accompanied by significant ageing. Between 2010 and 2023, the population aged 0 to 14 in the Azores decreased by nearly 24%, while the population aged 65 and over increased by 30% (Figure 2.6). These shifts in demographic structure are among the most pronounced in Portugal.

Figure 2.6. Recent population trends in Portuguese regions

Population change by age group from 2010 to 2023 by TL2 region in Portugal

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Some municipalities record a higher share of old-age residents compared to others. In Lajes do Pico and Calheta, the old-age dependency rate, defined as the ratio of residents older than 65 to those aged 15 to 64, is above 37%, while in Ribeira Grande, it is close to 17% (Figure 2.7). Faial and Terceira have been ageing more rapidly than others in the Azores, as the old-age dependency rate has increased by close to 10 p.p. in those islands from 2011 to 2023 (Annex Figure 2.A.4).

Figure 2.7. Lajes do Pico and Calheta record the highest old-age dependency ratios.

Old-age dependency ratio (65+/15-64) in 2023 in Portuguese municipalities

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Examining the population pyramid, from 2025 to 2060, the young population and the working-age population are expected to decrease by around 33% and 34%, respectively (Figure 2.8). This will have significant impacts on the education system and school network, possibly necessitating school consolidations and closures which require difficult policy decisions about maintaining educational access in remote communities. For the regional economy, labour shortages will likely emerge across various sectors, potentially driving up wages but also constraining economic growth and deterring new investment. In the meantime, the old-age population is expected to increase by around 65%, which will add pressure on the healthcare system of the Azores, as the demand for healthcare will drastically increase.

Figure 2.8. The Azores is expected to continue ageing in the next decades.

Population and projected population, by age group and sex, 2023 and 2060

Source: OECD calculations based on Eurostat (2025), Population on 1st January by age, sex, type of projection and NUTS 3 region, link

Socio-economic context in the Azores

Regional GDP per capita in the Azores is below Portugal’s national average and two-thirds the EU average (Figure 2.9), with a small contribution of sectors such as industry, information and communication, and professional, scientific and technical services to regional GVA. These characteristics are typical of the EU's Outermost Regions (ORs), which must cope with insularity, remoteness and small size. Recent policy initiatives aimed at diversifying the economy, including investment in renewable energy, improvements in digital connectivity and enhanced scientific research capabilities, together with support from EU policies and programs tailored to ORs (including the EU Cohesion Policy) nevertheless demonstrate potential for sustainable economic growth.

Figure 2.9. The GDP per capita in the Azores is below the national average.

GDP per capita in USD PPP, Portuguese regions, 2021

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

The Azores economy is driven by the primary sector and public administration, along with a growing tourism industry

The Azores economy has a relatively high reliance on the primary sector and public administration, while industries such as manufacturing are under-represented (Figure 2.10). Agriculture, forestry and fishing contribute 6% of the Regional Gross Value Added (GVA), the third largest share across Portuguese regions after Alentejo and Oeste e Vale do Tejo. The public sector accounts for 31% of the region's GVA, the highest proportion nationwide. In recent years, tourism has also become an important economic driver, benefiting from the islands' natural landscapes, biodiversity and cultural heritage, as well as from policy developments, such as the liberalisation of airspace in 2015 (Box 2.2).

Figure 2.10. The Azores’ economy is more reliant on agriculture, tourism and public administration than other regions.

Gross Value Added (GVA) by economic activity in %, Portuguese regions, 2022.

Source: INE (2025), Quadro D.2.1 - Valor acrescentado bruto por NUTS III e ramo de atividade A10 (preços correntes; anual), https://www.ine.pt/ngt_server/attachfileu.jsp?look_parentBoui=669032380&att_display=n&att_download=y

Box 2.2. The growth of the tourism sector in the Azores

The Azores archipelago has experienced strong growth in its tourism sector over the past decade. Following the liberalisation of airspace in 2015, visitor numbers increased, positioning tourism as a central pillar of regional economic development. In 2022, the Azores recorded 3.3 million overnight stays and over 1 million guests, more than double compared to 2015. International visitors accounted for 60% of overnight stays in 2022. Total tourism revenues reached record levels that year, amounting to over EUR 136 million, including EUR 103 million from accommodation.

Tourism makes a substantial contribution to the regional economy. In 2022, the sector generated 13% of the Azores' gross value added (GVA), and under the Strategic and Marketing Plan for Tourism in the Azores – Horizon 2030 (Plano Estratégico e de Marketing do Turismo dos Açores – Horizonte 2030, PEMTA), the regional government aims to increase this contribution to 19% by 2030 (Azores Government - Regional Directorate for Tourism, 2025[4]) ​.

Policy coordination has played a crucial role in managing tourism growth. The Tourism Spatial Plan for the Autonomous Region of the Azores (Plano de Ordenamento Turístico da Região Autónoma dos Açores, POTRAA), adopted in 2008, established a strategic framework for sustainable tourism development. The POTRAA introduced regulations governing tourism carrying capacity, land-use management and infrastructure planning to ensure environmental conservation and balanced distribution of tourism-related investments (Legislative Assembly of the Region of the Azores, 2008[5]).

Sustainability remains a key priority in the Azores’ tourism strategy. In 2019, the archipelago became the first globally certified sustainable tourist destination by EarthCheck. Since then, the regional government has reinforced its commitment by promoting balanced tourism development across all nine islands, enhancing service quality, preserving the region’s natural and cultural heritage, and mitigating seasonal fluctuations in tourism flows.

Source: Azores Government - Regional Directorate for Tourism (2025), Strategic and Marketing Plan for Azores Tourism - Horizon 2030, https://turismo.azores.gov.pt/wp-content/uploads/2024/10/PEMTA_2030_SummaryVersion.pdf; Legislative Assembly of the Region of the Azores (2008), Plano de Ordenamento Turístico da Região Autónoma dos Açores, Decreto Legislativo Regional n.º 38/2008/A de 11 de Agosto de 2008, https://jo.azores.gov.pt/api/public/ato/ec089871-1fcc-466b-b9d7-c695b76307af/pdfOriginal.

Demographic change and structural shifts are reshaping the local labour market

Demographic trends, including the decline in the youth population and an increasing old-age dependency ratio, pose significant risks to economic development in the Azores. While the working age population has started to decline in recent years, the region's workforce has also rapidly aged, with the median age increasing from 39 to 42 years since 2011. This demographic shift is further illustrated by the declining ratio of younger workers (aged 20-39) to those in the later stages of their career (aged 40-59), which decreased from 1.24 to 0.83 over the same period (Eurostat, 2025[6]).

A shrinking workforce typically exacerbates labour and skill shortages, creating challenges for employers seeking to fill vacancies, particularly in high-demand sectors. Such shortages can negatively affect productivity, innovation and overall economic dynamism. While increases in productivity could partially mitigate the impact of a declining working-age population, productivity growth has remained weak across most OECD regions in recent decades (OECD, 2024[7]).

Higher employment rates despite shrinking labour markets

An analysis of the Azorean labour market reveals notable shifts in the distribution of the employed, unemployed and inactive populations. Between 1995 and 2023, the share of employed individuals in the working age population (15-64 years of age) increased significantly from 55.2% to 68.2%. while the unemployment rate remained below 5% (Figure 2.11). Labour market participation gradually converged towards EU levels by 2023.

Figure 2.11. Population decline has led to smaller but stronger labour markets

Distribution of the working age population (15-64) by employment status (employed, unemployed and inactive), 2001-2023.

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Understanding the talent development trap and its drivers

In some regions, demographic decline is compounded by a shrinking base of skilled youth, leaving them without the talent needed to drive recovery and adapt to change. It is often the case that the individuals who decide to leave the region are also those that are young and of family starting age. In its 2023 Communication on Harnessing Talent in Europe’s Regions (European Commission, 2023[8]), the European Commission identifies the Azores as one of the 82 regions most exposed to this risk​. These “talent development trap” regions face both a declining working-age population and challenges in attracting or retaining skilled workers, undermining their long-term development.

Youth outmigration has reversed in the Azores since the pandemic

In the Azores, youth outmigration was strong until 2020 (Figure 2.12). The net migration rate for people aged 15 to 39 from 2010 to 2023 was -8.1%, far greater in absolute terms than the -2.4% rate for the total population. From 2014 to 2019, the yearly net migration rate for this age group remained below -1%, more than twice the rate observed for the total population. This trend reversed after the pandemic, with net migration reaching positive values and continuing to increase, suggesting improved population retention and potential inflows of young migrants.

Figure 2.12. Youth net out migration has reversed

Net migration rate for population aged 15 to 39, 2010 to 2022.

Note: Net migration for the population aged 15 to 39 is estimated based on yearly population by age and deaths, using the following formula, which corresponds to the residual between population change and natural change for the age group 15-39: (POPF_Y15T39 - POPI_Y15T39) – (POPI_Y14 – POPI_Y39 - DEATHS_Y15T39), where POPI_Yk is the population aged k on January 1, POPF_Yk the population aged k on December 31, DEATHS_Yk the number of deaths at the age k.

Sources: OECD calculations based on Eurostat (2025), Deaths by age, sex and NUTS 2 region, link and Eurostat (2025), Population on 1 January by age, sex and NUTS 2 region, link.

The share of young workers in the labour force has dropped significantly

Despite overall demographic stabilisation, many young and educated individuals continue to leave the region in search of better opportunities on the mainland or abroad. The regional economy remains heavily reliant on the primary sector, public administration and the tourism industry, which offers limited opportunities for the increasingly highly educated youth, contributing to growing skills mismatches in the local economy and accelerating high-skill emigration. The situation is even more critical in rural areas, where opportunities for young, skilled individuals are very limited. Between 2011 and 2022, the share of young workers in the labour force has declined sharply. In 2011, there were 12 young workers (aged 20-39) for every 10 late-career workers (aged 40-59), whereas by 2022 this ratio had dropped to just 8 young workers per 10 late-career workers, underscoring a deep labour market shift (Figure 2.13). Looking at the same time period, the population aged 15-24 decreased regardless of whether they were employed, unemployed or inactive in the labour force, suggesting that the youth leave the region not just to find work, but also in search for better opportunities that fit their skills profiles (Figure 2.14).

Figure 2.13. The ratio of young to late career workers dropped notably in the Azores.

Ratio of employment of young (20-39) and late career (40-59) workers (2011-22)

Source: OECD calculations based on Eurostat (2025), EU Labour Force Surveys, https://ec.europa.eu/eurostat/web/microdata/european-union-labour-force-survey.

Figure 2.14. Young people tend to leave the Azores regardless of their employment situation

Change in the population by age group and by employment status, 2011 to 2022

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Uneven occupational distributions between the young and old highlight potential future skill mismatches

Young (20-39 years) and late-career (40-59) workers are unevenly distributed across occupations (Figure 2.15). While some differences reflect natural career progression as workers gain experience and move to more complex roles, nonetheless, young workers are underrepresented in skilled agricultural occupations, trade work and industrial positions such as plant and machine operators. Instead, they are more concentrated in clerical, service and sales occupations, as well as roles for managers, professionals and technicians. The occupations where young workers are underrepresented could face labour shortages in the future as fewer local young new entrants join these sectors.

Figure 2.15. Young workers tend be less present in skilled agricultural occupations, trade work and industrial occupations.

Employment by occupation and by age group

Source: OECD calculations based on Eurostat (2025), EU Labour Force Surveys, https://ec.europa.eu/eurostat/web/microdata/european-union-labour-force-survey.

In the Azores young workers are more likely to hold high-skilled positions than late-career workers with 32.4% of young workers in high-skilled jobs compared to 28.6% of late-career workers. This suggests that high-skilled work may face fewer shortages in the future. However, this can also suggest an insufficient number of suitable high-skilled positions for older workers, creating a situation where only a portion of skilled younger workers secure appropriate employment and stay in the region while others depart due to limited opportunities matching their qualifications.

Institutional and policy context

As inscribed in the 1976 Constitution, Portugal is a unitary country with a three-tier system of subnational governments, composed of regions, municipalities and localities. However, only the Azores and Madeira, have been granted the status of autonomous regions (Regiões Autónomas), as overseas provinces with an unique history and identity, while in Portugal mainland, the administrative regions have never been implemented (a referendum was held in 1998 but failed). Therefore, regional governance arrangements are asymmetric, with the two self-governing regions of Azores and Madeira overseas, and five deconcentrated regional agencies, named Commissions for Cooperation and Regional Development (CCRD), in Algarve, Alentejo, Norte, Centre and Lisbon and Tagus Valley. The CCRDs’ role is to manage regional policies and co-ordinate central government services at the regional scale (OECD, 2020[9]).

At the local level, Portugal counts 308 municipalities (concelhos), which are basic local government units, with executive and deliberative organs. There are also 3 259 parishes (freguesias), an increase from 3 092 in 2024, following the reinstatement of 167 previously merged parishes on mainland Portugal in 2025. Parishes are smaller, community-level units within municipalities, but with their own elected bodies and budgets. Portugal also has metropolitan areas (like the Lisbon and Porto metropolitan areas) and inter-municipal cooperation entities (Comunidades Intermunicipais - CIMs) to manage common interests across municipalities (e.g., transport, environment).

Local governments in the Azores are on average 2.5 times smaller than in Portugal as a whole, with 13 042 inhabitants per municipality compared to 33 348 for Portugal, and 1 599 inhabitants per parish compared to 3 331 for Portugal (Table 2.1). On the other hand, the average size of municipalities in Portugal is large compared to other EU countries, with only 1% of municipalities having less than 2 000 inhabitants in Portugal compared to 28% in the EU, and 40% having 20 000 inhabitants or more compared to the EU average of 26% (OECD, 2024[10]).

Table 2.1. São Miguel island concentrates more than half of the Azores’ population.

Population distribution across the Azores archipelago in 2023

Island	Total population (2023)	Number of municipalities	Average municipal population size (2023)	Share of Azores population (2023), per cent	Number of parishes	Average parish population size (2021)
São Miguel	136 659	6	22 776.5	56.7	64	2 082.6
Terceira	53 526	2	26 763	22.2	30	1 774.5
Faial	14 466	1	14 466	6	13	1 102.4
Pico	14 347	3	4 782.3	6	17	816.4
São Jorge	8 446	2	4 223	3.5	11	761.2
Santa Maria	5 502	1	5 502	2.3	5	1 081.2
Graciosa	4 100	1	4 100	1.7	4	1 022.5
Flores	3 544	2	1 772	1.5	11	311.6
Corvo1	435	1	435	0.2	0	N/A
Azores	241 025	19	12 685.5	100	155	1 515.5
Portugal	10 639 726	308	34 544.6	-	3 092	3 345.1
OECD	-	132 210	10 432	-	-	-
EU27	-	85 530	5 249	-	-	-

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats. EU27 and OECD averages from OECD (2024) OECD Dashboard on Subnational Government Structure and Finance | OECD

The Azores has a unique and spatially dispersed governance structure

The Azores’ regional governance structure derives from its special status of Autonomous Region, as established in the 2009 Law on Political-Administrative Status of the Autonomous Regions of the Azores (EPARAA). It has its own governing body and legislative power in the Azores Regional Government and Legislative Assembly, with branches spread across the three most populated islands. The region also has a special status at the EU level as an EU Outermost Region (Article 349 of the Treaty of the Functioning of the European Union). As such, it benefits from a tailored application of EU law and access to EU programmes and funds, as well as from ad hoc strategies aimed at mitigating structural challenges rising from its unique situation.

The Azores has a two-tier local government structure consisting of 19 municipalities and 155 parishes. Both tiers have independently elected governments and dedicated budgets established by two pieces of legislation. Law No. 5-A/2002 defines their competences and operational legal framework, while Law No. 159/99 governs the transfer of powers and responsibilities to these local authorities. Parish representatives also hold positions within municipal governments.

The EPARAA grants the Regional Government supervisory authority over local authorities through Article 90, but within constitutional limits. The regional supervision is mainly administrative to ensure legality, not political control, and the regional government does not exercise hierarchical authority. Local authorities remain autonomous, and municipal funding primarily flows through a fiscal framework and transfer system that remains overseen by the central government.

As of 2025, the Autonomous Region of the Azores does not have formal inter-municipal cooperation bodies equivalent to the CIMs established on mainland Portugal. However, the EPARAA (article 133) allows for the establishment of special cooperation or partnership relationships between local and regional bodies to promote economic, social, and cultural development. These arrangements are typically ad hoc and project-specific, rather than forming permanent inter-municipal institutions.

The current multi-level governance system demonstrates an interweaving of the various subnational levels of government in the Autonomous Region (Figure 2.16). In addition, the regional governing and administrative bodies in the Azores are distributed across the islands, and in particular the three most populated islands of São Miguel, Terceira and Faial (Box 2.3). This underlines the essential need for coordination of regional policies and strategies, including to meet large-scale, cross-functional objectives such as those linked to demographic change.

Figure 2.16. The Azores has a multi-level governance structure spanning across nine islands and mainland Portugal

The Portuguese model of multi-level governance applied to the Azores

Source: Author’s elaboration

Box 2.3. The spatial organisation of regional public institutions in the Azores is adapted to the diversity of the territory

• The Legislative Assembly sits in the city of Horta, on the island of Faial. It has one chamber and is composed of 57 members. The deputies are directly elected through a proportional system where each of the nine islands elects Members of Parliament (MPs) according to their registered voter population. The D'Hondt method is used to allocate parliamentary seats, with an additional five members chosen through a compensation constituency to ensure proportional representation. After elections, the Assembly members vote among themselves to elect their President who will lead the chamber.

• The Regional Government is based in Ponta Delgada, on the island of São Miguel. It is headed by a President appointed by the representative of the Republic according to the results of the elections to the legislative assembly. The various regional secretariats and directorates are spread across the islands of São Miguel, Terceira and Faial. Regional health services are organised into nine Island Health Units (Unidades de Saúde de Ilha), corresponding to each island, and regional education services are provided across all islands through Education Organic Units (40 as of 2024).

• The regional government has established service centres across all nine islands since 2006, functioning as one-stop shops for citizens and businesses. These local outposts operate under two connected networks: the Agency for the Modernization and Quality of Citizen Service (RIAC) and the Integrated Entrepreneur Support Network (RIAE). Together, they provide direct access to public services spanning social, economic and cultural domains, creating a streamlined interface between the regional administration and its users.

• University campuses are scattered throughout the three islands according to specialisation, and regional judicial courts are spread across the different islands.

The central government is also represented through deconcentrated state services across the islands. These services are responsible for implementing national policies in areas of security, public forces, and in other areas shared with the regional government, such as social security and finance

Sources: Law 2/2009, 12 January, on the Political and Administrative Statute of the Autonomous Region of the Azores Microsoft Word - Statutes_EN.docx; RIAC – Agency for the Modernisation and Quality of Citizen Service, I.P. Homepage - RIAC – Agency for the Modernisation and Quality of Citizen Service, I.P. - Portal

The Autonomous region of the Azores, and its local governments, have extensive responsibilities

Overall, Portugal is among the most centralised countries in the OECD in terms of subnational government spending, revenue and debt (Figure 2.17). In 2022, Portuguese subnational governments represented 14.7% of total public expenditure and 9.9% of total public tax revenue, below the averages for OECD unitary countries and EU countries. When examined separately, the two autonomous regions account for approximately 3.6% of public expenditure and 2.8% of tax revenue, while they gather approximately 4.7% of the total population. On the other hand, Portuguese municipalities represent 11.4% and 6.3% of total public expenditure respectively (INE, 2023[11]) (CFP, 2023[12]).

Although subnational governments contributed nearly half of Portugal's total public investment in 2022, their overall investment level remains modest at 1.1% of GDP. This figure falls below both EU and OECD unitary country averages of 1.8% and 1.9% respectively (OECD, 2024[10]). Similarly, subnational government debt constitutes only 4.5% of Portugal's total public debt, with autonomous regions responsible for 3.3% and municipalities for 1.2%, again lower than comparable OECD and EU averages.

Figure 2.17. Subnational finances in Portugal are highly centralised

Key subnational government finance indicators for Portugal, as % of general government (2022)

Note: The OECD unitary average include data for all 29 unitary countries, except the average for public investment which does not include data for Israel.

Source: OECD (2024) OECD Dashboard on Subnational Government Structure and Finance (OECD, 2024[10])

The Autonomous Region of the Azores has a unique and singular situation within the Portuguese system, granted mainly by the Portuguese Constitution and detailed in the EPARAA. The Azores can legislate (within limits) on many matters of regional interest, including agriculture, fisheries, environment, health, education, tourism, culture, transport, energy, and land use planning. It can also adapt national laws to regional specifics. The Regional Government implements both regional and national laws in areas under its jurisdiction. It manages public services in fields like healthcare through its regional health administration (Serviço Regional de Saúde dos Açores – SRS-A) which has broad responsibilities, education (all the education system except higher education, although regional support is provided to the University of the Azores), and environmental protection. It administers regional assets and resources.

Municipalities also have important responsibilities, and because of insularity they often take on more practical tasks that elsewhere would be managed at higher levels. Municipal responsibilities include urban planning and land use management, basic infrastructures, education, local public transport and mobility, local economic development, culture, sport and recreation, basic social services and civil protection.

Several responsibilities are shared between municipalities and the regional government. For example, in the education sector, the regional government runs public schools under national rules but adapted to their specific realities. Municipalities manage certain logistics like transport of students, school meal programs (basic education). They are responsible for maintenance of primary schools (buildings and equipment) and organise extracurricular educational activities. transportation responsibilities are also shared, with the regional government overseeing public transport in inter-municipal and suburban areas, whereas individual municipalities manage transportation within municipal boundaries. Urban land use planning is similarly shared between the region and the municipalities (Table 2.2). Certain responsibilities can also be outsourced to public (regional indirect administration) or private entities through delegation or concession arrangements, particularly in the healthcare, education, transportation and energy sectors.

At the sub-municipal level, parishes also take on various responsibilities based on community needs, including arranging transport for healthcare services, maintaining schools and public spaces, organising care services for elderly residents and providing social support programs for families.

Table 2.2. Responsibilities for economic and social affairs are shared widely between subnational government in the Azores

		Central government	Azores Regional Government		Azorean municipalities and parishes
	Demographic impact	Competence areas	Competence areas	Regional expenditure as % of regional GDP	Competence areas
Economic affairs	Likely (+ / -)	Airports Agriculture, rural development, irrigation, IT	Ports, airports, roads, public transport (inter-municipal and suburban) Employment, construction, tourism, commerce, and energy Agriculture & rural development, IT	9.6%	Tourism, commerce Public transport (municipal) and roads Transportation of patients (parishes) Support to local enterprises
Health	High (-)	National standards	Medical and paramedical services Primary and preventive healthcare, specialised care, hospitals and health centres	8.1%	Transfer of patients across localities
Education	Moderate (+ / -)	National framework standards Higher education R&D	School buildings and maintenance of infrastructure	5.8%	Pre-primary education, training/vocational education Maintenance of school spaces (parishes)
Social protection	Likely (-)	Social protection Pensions Integration of immigrants	Housing subsidies, social exclusion and unemployment Elderly and disabled people, immigrants, children care	0.6%	Social care, social welfare centres Integration of immigrants
Housing and community amenities	Likely (+ / -)	Housing policies	Urban land use planning, public lighting, housing	0.4%	Urban land use planning, public lightning, water Management of green and public spaces, markets (parishes)

Note: This table is non-exhaustive and focuses on key functional policy areas related to demographic change.

Source: Author’s elaboration based on World Observatory on Subnational Government Finance and Investment (OECD/UCLG, 2022[13])

The Azores enjoys significant fiscal autonomy yet within a centralised fiscal framework

Portugal's asymmetrical regional governance structure system grants the Azores a unique fiscal position that combines regional autonomy with national fiscal integration. The EPARAA enshrines a system of national solidarity to compensate the autonomous regions for the costs of insularity for public service delivery and investments (Art 7, 12, 17). The statute also empowers the region to modify national tax regulations to address local circumstances and to exercise independent taxing authority (Art 50). These freedoms are further strengthened by the 2001 Budgetary Framework Law and the 2013 Autonomous Regions Finance Law (LFRA), which grant additional fiscal autonomy to the Azores. In contrast, municipal finances operate under the centrally determined 2013 Local Finance Law (LFL). Both the LFRA and LFL are currently under revision as of 2025.

The Regional Government has financial autonomy (guaranteed by the Constitution and the EPARAA). Its revenues come mainly from shared taxes (The Personal Income Tax - IRS, the Corporate Income Tax - IRC and the Value Added Tax - VAT). It also collects own-source taxes and fees, e.g. in the environment and tourism sectors. The Region also receives transfers from the Central government allocated under the Regional Finance Law (Lei das Finanças das Regiões Autónomas - RFL) and EU funds. As an EU Outermost Region, the Azores also receive special EU funding. Finally, the region can contract debt within constitutional and legal limits (conditioned to the approval from national authorities above certain thresholds). In this respect, its level of autonomy is comparable with that of other European regions and states (Box 2.4).

Municipalities have local financial autonomy (guaranteed by the Constitution, Article 238). Their main revenues are composed of local Taxes - including the property Tax (IMI), a municipal surcharge on the Corporate Tax (Derrama Municipal), a municipal Tax on Onerous Transfers of Real Estate (IMT) – and user charges and fees. They also receive transfers from the central government (Fundo de Equilíbrio Financeiro (and Fundo Social Municipal) and funding from the EU, especially for environmental, infrastructure and social cohesion projects. In the Azores, municipalities may also receive specific grants or programmatic co-financing from the Regional Government (especially for infrastructure, education, tourism, and environment). As smaller local bodies, parishes enjoy simpler financial sources, such as transfers from municipalities, small service fees and minor real estate rents or income from local property.

Box 2.4. Measuring the Regional Authority of the Azores regional government

The Regional Authority Index quantifies regional government autonomy through two dimensions, self-rule (measuring a region's authority over its own territory) and shared-rule (measuring a region's influence in national governance), with a higher score representing greater regional authority.

According to the index, the Azores enjoys substantial regional autonomy, comparable to other EU regions with legislative powers such as the UK devolved nations, Åland in Finland and the states within Spain and Germany (Figure 2.18). Conversely, the region has limited influence over national legislation and policymaking. While mechanisms exist to involve the region in a consultative and advisory capacity in national executive policy and law making, they do not provide the region with a formal role in decision-making. The financial framework ensures regional alignment with national fiscal sustainability objectives, but major fiscal policy decisions, particularly regarding municipal finance reforms, remain under central government authority. This arrangement positions the Azores in a middle ground between complete dependency and full sovereignty, incorporating elements of both federal and unitary systems (Ackrén, 2018[14]).

Figure 2.18. The Azores enjoys high regional autonomy but has limited influence in national governance

Regional Authority Index, decomposed by self-rule (blue) and shared-rule (red) components. Higher score indicates greater authority.

Note: Blue: The Regional Authority Index is a measure of the authority of regional governments authority according to two main concepts: 1) Self-rule (in blue in the figure), with a maximum score of 18, describes the authority exercised by a regional government over those who live in the region. 2) Shared-rule (in red in the figure), with a maximum score of 12, describes the authority exercised by a regional government in the country as a whole. A score of 30 would correspond to the maximum conceivable level of regional authority within a unitary or federal state according to the index’s framework.

Source: Regional Authority Index (Marks, Hooghe and Schakel, 2021[15])

Demographic challenges in the Azores are addressed through a multi-tiered and multi-sectoral policy approach

Measures to address demographic challenges in the Azores range from training programmes and employment schemes, to support to economic development and sustainable tourism, tax reductions, social assistance for elderly and transport subsidies. These actions are taken at all levels of government, including national, regional and municipal (Annex Table 2.B.1). Most of these initiatives are financed through the Portugal Recovery and Resilience Plan (RRP) and EU Funds, under the framework of the Azores 2030 Operational Programme (Box 2.5).

Box 2.5. The Azores’ Regional Operational Programme and EU Funding Architecture

The Azores’ Regional Operational Programme (ROP) “Azores 2030” is a multi-fund programme driving regional investment, amounting up to EUR 1.403 billion for 2021-2027. The ROP is co-financed by the European Union up to 81% - 48.5% from the Regional Development Fund (ERDF) and 32.8% by the European Social Fund (ESF+) - and by 18.8% of national contributions.

The ROP aims to contribute to the fulfilment to build a “smarter, greener, more connected, more social and more citizen‑centered Europe”. It is structured through an annual series of tenders, targeted to a wide range of beneficiaries such as local governments, administrative bodies and other regional stakeholders, under the supervision of the Regional Directorate for Planning and Structural Funds acting as the Managing Authority.

Azores 2030 is a continuation of Azores 2020, which amounted to EUR 1.4 billion for the 2014-2020 programming period. Azores 2020 was structured in 12 priority axes, and its implementation came to term in 2023. For 2021-2027, the total amount of the ROP is distributed according to six key priorities:

• Promotion of qualified employment and education (approximately 25% of the total ROP)

• Smart economic growth: competitiveness, research development and innovation, and digital connectivity (approx. 21%)

• Health and social cohesion (approx. 18%)

• Environmental sustainability and resilience to climate change (approx. 16%)

• Digitalisation and proximity to public administration: Around 13% of the total ROP is allocated to improving the economic and social conditions in the territory and accessibility.

• Youth support (approx. 6%)

The Azores can also use Cohesion Funds to finance investments projects aimed at overcoming challenges related to its status as an ORs, including air transport services, as supported under Article 349 of the TFUE (5% of the total envelope). A small portion of the ROP is also dedicated to technical assistance.

Additionally, as an OR, the Azores benefits from EU funding across multiple sources. It receives national cohesion transfers (Fundo de Coesão das Regiões Autónomas) and has preferential access to the RRP, the European Maritime, Fisheries and Aquaculture Fund (EMFAF) and the European Agricultural Fund for Rural Development (EAFRD). The Azores has also access to specific EU programmes tailored to its status, such as the Programmes of Options Specifically Relating to Remoteness and Insularity (POSEI) for agriculture and fisheries and the Interreg Madeira-Azores-Canary Islands (MAC). Furthermore, the region demonstrates strong access to EU funds under direct and indirect management such as Horizon Europe, LIFE, or Connecting Europe Facility compared to other EU ORs.

Source: Açores 2030 Portal, accessible at: https://acores.portugal2030.pt/o-acores-2030/.

At the national level, Portugal has implemented several policies to mitigate demographic challenges, mostly focused on retaining and attracting talent and enhancing economic attractiveness. The National Action Plan for International Migration (Plano de Ação para as Migrações) seeks to address labour shortages by facilitating the integration of skilled workers into the labour market and establishing dedicated visa processing channels. This is complemented by a flat 20% personal income tax rate for qualified professionals in scientific research and innovation fields (IFICI+), training programs in hospitality and other key sectors (Programa Acelerar a Economia) and measures to encourage companies to set up daycare centres. The overarching “Portugal 2030” strategy, which falls under the broader EU’s Multiannual Financial Framework 2021-2027, integrates demographic concerns by focusing on employment, skills development, and social inclusion. This strategy operates through programs tailored to the needs of less‑developed regions such as the Azores.

The Azores regional government is undertaking several measures to promote sustainable economic development while addressing demographic challenges, particularly the outmigration of young people. The “Azores 2030” strategy, in line with “Portugal 2030”, prioritises investment attraction, environmental sustainability and digital transformation. Regional employment initiatives focus on creating stable jobs while enhancing workforce skills through programmes that better connect education with local economic needs (Agenda Regional para a Qualificação Profissional, Estagia, or Mais Jovem). The regional government also offer social support programme in housing, transportation, health or social care (e.g. Novos Idosos, which provides individual care plan and financial support for elderly, and the national Solidarity Complement for the Elderly).

Tourism serves as a central economic driver for the Azores, supported by the Azores Tourism Strategic Marketing Plan 2030, which funds business growth and stable employment in hospitality. At the municipal level, Azorean municipalities lead initiatives for enhancing cultural appeal. For example, Ponta Delgada’s Cultural Strategy 2030 promotes creative industries and heritage to increase appeal for both residents and visitors, while also emphasising inter-municipal and inter-island collaboration.

Attracting and retaining young people is a key objective for addressing demographic change that is reflected in many measures at all government levels (Table 2.3). These include tax benefits and tax exemptions, giving young people a voice at the institutional and political level, and support for training and employment qualification. At the regional government level, these measures are gathered under the Mais Jovem programme, which aims to attract and retain talent in the Region.

Table 2.3. Strategies to enhance youth retention in the Azores are undertaken at all government levels

Select initiatives to retain and attract youth in the Azores

Level	Measure
National	IRS Jovem: provides reduced personal income for young people (Portuguese Republic, 2025[16])
	IMT Jovem: provides reduce property transaction tax pour young people (Portuguese Republic, 2025[17])
	Accelerating the economy programme: development of training/employment programs in the hospitality sector for migrants (Portuguese Republic, 2024[18])
Regional	Salary Valuation: Minimum wage 5% higher in the Azores than in mainland Portugal, reimbursement of tuition fees and ITS for young people who commit to work in Azores for 5 years following their training (Regional Directorate for Youth, 2025[19])
	ESTAGIAR: internship schemes targeting various qualification levels (school-leavers to university graduates) designed to ease entry into employment and encourage settlement in smaller islands (Regional Directorate for Youth, 2025[19]).
	Employability Scholarship: simplified online registration mechanism for young candidates for their first or new job (Regional Directorate for Youth, 2025[19]).
	Regressa a Casa: Mobility grants for airline tickets, including the purchase of checked baggage , when this is not included in the airfare price, to young people who are away from their island of residence to study (Regional Directorate for Youth, 2025[19]).
	Municipal Observatory for Youth: established under the Regional Directorate for Youth, this observatory aims to provides evidence-based support to municipal youth policy by gathering and analysing data on youth participation, aspirations, and civic engagement.
Municipal	Adapted fiscal regimes: reduction in property tax (IMI) breaks for young people and families, stamp duty deduction for people under 35, and other reduction on specific municipal fees and taxes.
	De Volta ao Faial programme: return of tuition fees paid in public higher education and exemption on Municipal Property Transfer Tax on the acquisition of permanent housing up to 200 000 EUR by the municipality of Horta (Municipio da Horta, 2024[20])
	Youth Municipal Council: official consultative bodies, with the mandate to review and contribute to the Youth Municipal Plan. The Council’s inputs are formally considered in the approval and design of municipal youth policies and plans. They exist in many municipalities (Ponta Delgada, Angra do Heroismo, Lago, etc). (Ponta Delgada Camara Municipal, 2025[21])

Note: This table is not exhaustive. Sources are listed in the table.

Annex 2.A. Demographic trends in the Azores

Annex Figure 2.A.1. The Azores ranks 142^nd out of 183 European large regions in terms of overall population change.

Population change in OECD European large regions from 2011 to 2021.

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Annex Figure 2.A.2. Negative natural change across most municipalities from 2011 to 2023.

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Annex Figure 2.A.3. Positive net migration in Pico and Corvo Islands from 2011 to 2023

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Annex Figure 2.A.4. Terceira and Faial record the largest increase in old-age dependency rates.

Change in the old-age dependency rate (65+ over 15-64), pp., 2011 to 2023 in Portuguese municipalities

Source: OECD (2025), OECD Regions, cities and local statistics, OECD, Paris, http://oe.cd/geostats.

Annex 2.B. Key policies and strategies for demographic change

Annex Table 2.B.1. Key national, regional and local policies related to demographic change

Level of government	Policy	Sector	Topic
National	Action plan for international migration	Migration policy	Attracting talents, via measures such as resolving regularisation pending cases, including of labour migrants, setting up municipal/intercity emergency reception centres for immigrants in cooperation with municipalities, reinforcing of the offer, coverage and frequency of Portuguese language teaching.
	Accelerating the Economy Programme	Skills, labour and fiscal policy	Measures for attracting talents include fiscal incentives for companies, support to smart specialization, and development of training/employment programs in the hospitality sector for migrants.
	National Strategy to Combat Poverty	Family policy	Fiscal measures and support packages include preferential tax breaks for young people (IRS Jovem and IMT Jovem), reduced VAT (6%) on baby food and children's products, and 90% reimbursement for infertility treatment medications. Additionally, the country encourages businesses to establish on-site daycare centers.
		Elderly support	Comprehensive support measures for the elderly, including a Solidarity Complement for the Elderly, the development of homes and palliative care units and other consumption supports for those in need (e.g. free incontinence diapers).
	Portugal 2030	Employment and social policies	Addresses demographic challenges through the PESSOAS 2030 programme, focusing on demography, qualifications, and inclusion, particularly in less developed regions of mainland Portugal.
Regional	Azores 2030	Attracting investment	Azores 2030 is committed to attracting domestic and foreign investments, focusing on territorial policies and green agendas, including digitalisation of public and private services, and attracting and retaining residents through enhanced employment opportunity (“Construir 2030”).
	Professional Qualification and Employment Policy	Employment policy	Package of measures to improve employment quality, skills development, and social inclusion. Initiatives such as "Contratar Mais", "Estagiar" and "Eudisseria" encourages stable job creation and increase young people and job seekers employability. The Regional Agenda for Professional Qualification focuses on aligning education and training with the needs of the local economy.
	Mais Jovem	Attraction and retention of young talents	Measures ranging from payment of flight tickets for young students, reimbursement of tuition fees and ITS for young people who commit to work in Azores for 5 years following their training, etc.
	Nascer Mais	Fertility policy	Non-refundable financial incentive of 1 500 euros for products purchased in pharmacies to all children born in the Azores in their early years.
	Novos Idosos	Elderly support	Monthly financial support and Individual Care Plan aimed at seniors aged 65 or over and in a vulnerable situation.
	Azores Tourism Strategic Marketing Plan 2030	Tourism and employment policy	Financial support programs to help tourism businesses grow and adapt, and projects that promote the Azores as a destination while generating stable employment opportunities ("Turismo Estável"). The Azores Fare policy ensures capped prices on domestic flights for residents, enhancing mobility across the archipelago and tourism.
	Tax Regime of the Azores	Investment support	Preferential tax rates, with IRC and VAT set 30% below national levels, aimed at making the region fiscally competitive in Portugal to attract investment, particularly in key sectors like tourism, agriculture, and innovation, and helping to retain local talent and improve overall living conditions in the archipelago. The regional government also provides a minimum wage 5% higher than in the mainland.
Municipal	Adaptation of the municipal tax regime	Youth attraction	Reduction in property tax (IMI) breaks for young people and families, stamp duty deduction for people under 35, and other reduction on specific municipal fees and taxes.
	Backhome – De Volta ao Faial programme	Youth retention	Return of tuition fees paid in public higher education and exemption on Municipal Property Transfer Tax on the acquisition of permanent housing up to 200 000 EUR.
	Support package	Family and fertility support	Discount shopping cards for families, financial support packages for families with newborns
	Cultural Strategy Ponta Delgada 2030	Cultural policy	Strategy aimed at mobilising the cultural and creative sectors, thereby enhancing community engagement and attractiveness to both residents and visitors to Ponta Delgada

Note: Non-exhaustive table, based on (OECD, 2024[22]), and Azores and Portuguese government websites.

References

[14] Ackrén, M. (2018), “Autonomous Island Regions”, 50 Shades of Federalism, https://50shadesoffederalism.com/case-studies/autonomous-island-regions/.

[4] Azores Government - Regional Directorate for Tourism (2025), Strategic and Marketing Plan for Azores Tourism - Horizon 2030, https://turismo.azores.gov.pt/wp-content/uploads/2024/10/PEMTA_2030_SummaryVersion.pdf.

[12] CFP (2023), CFP Report no. 01/2025: Autonomous Regions Budget Outturn in 2023.

[3] European Commission (2025), Harnessing Talent Platform, https://ec.europa.eu/regional_policy/policy/communities-and-networks/harnessing-talent-platform_en (accessed on  April 2025).

[2] European Commission (2025), Talent Booster Mechanism, https://ec.europa.eu/regional_policy/policy/communities-and-networks/harnessing-talent-platform/talent-booster-mechanism_en (accessed on  April 2025).

[8] European Commission (2023), Harnessing Talent in Europe: a new boost for EU Regions, https://ec.europa.eu/commission/presscorner/detail/en/ip_23_145.

[1] European Commission (2023), Harnessing talent in Europe’s regions, https://ec.europa.eu/regional_policy/information-sources/publications/communications/2023/harnessing-talent-in-europe-s-regions_en (accessed on  April  2025).

[6] Eurostat (2025), European Union Labour Force Surveys (EU-LFS).

[11] INE (2023), Anuários Estatísticos Regionais.

[5] Legislative Assembly of the Region of the Azores (2008), Plano de Ordenamento Turístico da Região Autónoma dos Açores, Decreto Legislativo Regional n.º 38/2008/A de 11 de Agosto de 2008, https://jo.azores.gov.pt/api/public/ato/ec089871-1fcc-466b-b9d7-c695b76307af/pdfOriginal.

[15] Marks, G., L. Hooghe and A. Schakel (2021), Regional Authority Index, https://garymarks.web.unc.edu/data/regional-authority-2/.

[20] Municipio da Horta (2024), Aprovação do Regulamento Municipal Programa «Backhome ― De Volta ao Faial», https://files.diariodarepublica.pt/2s/2024/06/114000000/0010800113.pdf.

[7] OECD (2024), Job Creation and Local Economic Development 2024: The Geography of Generative AI, OECD Publishing, Paris, https://doi.org/10.1787/83325127-en.

[10] OECD (2024), OECD Dashboard on Subnational Government Structure and Finance, https://www.oecd.org/en/data/dashboards/oecd-dashboard-on-subnational-government-structure-and-finance.html.

[22] OECD (2024), Questionnaire filled-in by the regional government.

[9] OECD (2020), Decentralisation and Regionalisation in Portugal: What Reform Scenarios?, https://doi.org/10.1787/fea62108-en.

[13] OECD/UCLG (2022), 2022 Country Profiles of the World Observatory on Subnational Government Finance and Investment, https://www.sng-wofi.org/country-profiles/.

[21] Ponta Delgada Camara Municipal (2025), Juventude, https://www.cm-pontadelgada.pt/pages/1248.

[16] Portuguese Republic (2025), IRS Jovem: o que é e como funciona?.

[17] Portuguese Republic (2025), IRS Jovem: o que é e como funciona?, https://www.portugal.gov.pt/pt/gc24/comunicacao/noticia?i=imt-jovem-e-isencao-de-imposto-do-selo-geraram-poupanca-de-77-milhoes-de-euros-para-20-mil-jovens.

[18] Portuguese Republic (2024), Acelerar a Economia - Crescimento, Competitividade, Internacionalização, Inovação e Sustentabilidade.

[19] Regional Directorate for Youth (2025), Portal Da Juventude, https://juventude.azores.gov.pt/en/programa/%2Bjovem/.

Note

← 1.  Corvo is the only island without a parish government. The ‘parish’ level exists here solely for statistical purposes.