Youth unemployment in Nigeria: nature, causes and solutions

This study investigates the nature and causes of youth unemployment in Nigeria, with the aim of proffering evidence-based workable solutions as policy recommendation. Its contribution to the literature on youth unemployment is the joint examination of the nature and causes of youth unemployment, which gives a holistic view and provides sufficient background for designing holistic solutions to the problem of youth unemployment in Nigeria. The study employs a Vector Autoregressive (VAR) model. This describes the spillovers of youth employment among different sectors (Agriculture, Industry and Services) in Nigeria; thus, explains whether the nature of youth unemployment in Nigeria is frictional or not. The study also adopts Panel Autoregressive Distributed (PARDL) model to analyze the short-run and long-run significance of the determinants of youth unemployment, such output level, macroeconomic uncertainties and labour market flexibility. This helps to determine the main causes of youth unemployment in Nigeria and whether the youth unemployment is cyclical or structural in nature. The results suggest that the nature of youth unemployment in Nigeria is non-cyclical, partly frictional, but largely structural. This may explain why youth unemployment is increasing in Nigeria despite government remedial efforts; as government focused on frictional youth unemployment remedial policies and dispelled the potential of youth unemployment being structural in nature. The recommended solutions are fiscal and monetary policy easing and demand-side subsidy programme to dealing with structural youth unemployment. The study also shows the need to enforce relevant extant labour laws and regulations to stem the tide of youth unemployment and underemployment in Nigeria.