Institutionalized costs and international migration patterns

This chapter investigates the effects of migration taxes on migration patterns and revenue generation at the source, with reference to the intra-ASEAN migration of workers. We show that when cross-border labor markets are fraught with incomplete information between potential employers and employees about the true quality of workers, migration patterns can be unconventional. Signaling about true productivity by prospective migrants can alter such patterns. Moreover, if migrants face additional costs, such as an exit tax, at the time of emigration from the source country it can also affect migration patterns. Since an information gap about true skill types and statistical discrimination in the labor market of destination countries often dissuades top skill types from migrating, a lower migration tax for high-skill workers could maximize revenue at the source.