This paper develops a theoretical model like Gupta (1993) to show the simultaneous existence of the urban informal sector and open unemployment in the urban sector in a Harris-Todaro type of model of rural-urban migration. The paper shows that a wage or a price subsidy policy to the rural sector...

This paper develops a theoretical model like Gupta (1993) to show the simultaneous existence of the urban informal sector and open unemployment in the urban sector in a Harris-Todaro type of model of rural-urban migration. The paper shows that a wage or a price subsidy policy to the rural sector...