The Harris–Todaro Migration Model and Introduction of the Informal Sector
An important aspect of urban unemployment in developing countries is that it is predominantly open. The massive influx of rural migrants in the cities has been instrumental in fostering an overwhelmingly faster population growth in urban areas than in the rural ones. Rural workers are lured to migrate by economic incentives as well as by other attractions of an urbane life. While some of the migrants do manage to secure jobs in industries, the less-fortunate ones get absorbed only in the urban informal sector and the rest wait for their chance to get employment and thus swell the number of open urban unemployment. A substantial portion of the urban population in a country like India is engaged in the informal sector.