Abstract WP12-02

This paper examines the structure of financing the consumption of youths in Nigeria. Nigeria is currently in the middle of demographic transition with the implications that the structure of the resource flows from the surplus of the working age group to the dependent age group keeps changing calling for the need to understand the dynamics of the consumption and income flows if the economic lifecycle deficit in the country will be adequately financed. The methodological approach was grounded on the theoretical tool of overlapping generation’s model (OLG) and the analytical approach of the National Transfer Approach. The paper reveals that by year 2009, life cycle deficit is positive for Nigerians aged 29 to 60 years, and deficit for other age groups. The implication of this is that on the average, Nigerians younger than 29 years do not produce enough to finance their consumption. In order to finance this consumption, our results indicate that intergenerational transfers, both private and public, are the main sources of consumption for these unemployed youths. It is further revealed that while private transfers (intra-household) fund most of youth consumption, they enjoy limited public transfers which is skewed towards the elderly.