In the case of unemployment insurance (UI), for example, the condition that one must not formally work to be eligible for benefits provides potentially strong incentives to simultaneously receive benefits and work in the informal sector. This may be important, for example, in the case of Brazil. Moreover, workers who can choose between formal and informal work, and who do not perceive the potential benefits of social insurance as outweighing their costs in terms of contributions, may in effect opt out of mandatory social insurance programmes by taking up informal work. Not only can this be detrimental to workers’ well being in the longer term, but by reducing the number of contributors to social protection systems, it also has potentially deleterious consequences for economic growth and risk pooling. However, the extension of health coverage in Mexico through the establishment of a new non-contributory system, Seguro Popular, suggests that this does not necessarily have to be the case in practice. There appears to be essentially no relationship between the gradual geographical roll-out of Seguro Popular and the incidence of informal work, except perhaps for those workers with the highest propensity of moving between informal and formal work.