Unemployment Rate and Cohort Size: New Insights from Nigeria

The nature of the relationship between unemployment rate and the size of a specifically defined age group, or cohort, notably the young workers in the working-age population, has been a subject of an intense debate, widely studied and generated a sizable body of literature. However, while the debate is still inconclusive, an in-depth reading of these expansive extant and crescive literatures suggests that besides the contradictory findings, one of the major drawbacks with these literatures is that hardly any studies have been reported exclusively for African countries, as most of the extant literature principally focused on European, Asian, and American economies. Moreover, generalized studies across countries employing pooled data appears to dominate the literature. Thus, using annual time series secondary data spanning between the period 1970 and 2019, this study employs bounds testing approach to co-integration to examine the nature of the aforementioned relationship in Nigeria. Empirical results obtained revealed that cohort size has an overwhelming positive and statistically significant impact on unemployment rate both in the short- and long-run, suggesting that the size of one’s generation, has repercussions not only on (un)employment outcomes of that particular group but also on other age groups in Nigeria.