Migration policies and international labour market competition

Many developing countries compete with each other to send migrants to rich and developed countries. This article analyses migration policy of two sending and one receiving countries with such migration. The labour exporting countries set the number of migrants unilaterally and compete à la Cournot with each other. The receiving country imposes origin-based migration tax rates. To maximise the benefit of migration, the receiving country uses discriminatory tax rates where the tax burden is highest for the country with the highest labour endowment.