Moreover, moral hazard is more difficult to control when unemployment beneficiaries have the possibility of working in the informal sector whilst claiming benefits.21 As a result, the provision of public UI may be very costly in emerging economies. Indeed, employment-protection rules have often been considered a low-cost way of providing social insurance to workers in such economies (Heckman and Pages, 2004). Providing UI effectively requires, first of all, the sound management of insurance funds.