(a) Rayansh works as a teacher in a school. He receives a fixed monthly salary, social security benefits, paid leave and medical allowances. His…

Rayansh is working in the formal sector.

On the other hand; Mohan is working in the informal sector.

Formal sector includes all the public sector establishments and those private sector establishments which employ $\displaystyle 10$ hired workers or more. Formal sector workers are entitled to fair wages and other social security measures such as pension, provident fund, etc. Additionally, they get paid leaves and medical allowances.

Whereas;

Informal sector includes those private sector establishments which employ less than $\displaystyle 10$ hired workers. Workers in the informal sector do not get regular income and social security benefits. They can be dismissed without any compensation. Additionally, they may not get paid leaves and medical allowances.

Human Capital Formation refers to the addition to the stock of human capital over a given period of time.

People migrate in search of job opportunities that fetch them higher earnings. Technically qualified persons like engineers and doctors, migrate to other areas because of higher incomes and better opportunities. Migration also involves transportation costs, higher cost of living and psychic costs of change in socio-cultural setup. However, the enhanced earnings at the new place outweighs the costs of migration; hence, expenditure on migration is the source of human capital formation.