Migration and urbanization has flooded cities in Pakistan and role the
urban informal sector plays is very imperative. The controversy is that
almost classical migration models take care of the informal sector as a
temporary employment opportunity for rural-urban migrants. Some
studies empirically examined that the informal sector may play an
imperative role in economic development. The present study
distinguishes between the wage-earner and self-employed groups
within the informal sector by using a survey data of 1487 participants
of the informal and formal sector in three divisions of Southern Punjab
(Pakistan). The study results highlight that both the wage earners and
self-employed group in the informal sector have played important role
in employment creation and in the economic development of Pakistan
economy. While wage earner group may provide temporary
employment opportunities to the participants and self-employed group
emerges as a desirable employment choice.