LISBON—Isabel Fernandes, a cheery 22-year-old with a constellation of stars tattooed around her right eye, isn't sure how many times she repeated fifth grade. Two, she says with a laugh. Or maybe three. She redid seventh grade as well. She quit school with an eighth-grade education at age 20.

Ms. Fernandes lives in a poor suburb near the airport. She doesn't work. Employers, she says, "are asking for higher education." Even cleaning jobs are hard to find.

Portugal...