Urban migration unlocks new employment opportunities for rural dwellers in a productive manner. This study assessed the quality of employment of migrant workers, and its effect on rural households’ welfare. To this end, we used primary data collected from the four major districts of Lahore, Gujranwala, Faisalabad, and Sialkot in Punjab, Pakistan. These data include 504 immigrant and non-immigrant families in rural areas, and 252 migrant workers in urban destinations. We use IV probit and two-step sequential estimation methods for the empirical analysis. The study provides new insights for migration in Pakistan. First, migrant workers are better off in their new urban settings in terms of improved incomes and living conditions, but their social protection status is still poor. Second, the results of the employment quality models show that migration is a successful strategy for rural households to improve the quality of their employment. In addition, the characteristics of migrants and native households affect the relative improvement in the quality of employment and migrants’ conditions. Third, the results of the propensity score matching technique suggest that migration has a positive impact on rural households’ income, and these impacts are more pronounced in large cities. Based on the findings, the study recommends that the government should invest in quality education in rural areas, and ensure that social security schemes are provided for migrant workers in urban areas.