These are more important in flexible labour markets that are characterised by relatively high levels of job creation and destruction. The design and scope of UI should seek to minimise potential moral-hazard effects and maximise its support to liquidity-constrained job losers. Given the difficulty of determining and monitoring continued benefit eligibility in the context of large informal sectors and a weak administrative capacity, it will be important to ensure that benefit schedules preserve good incentives for work in the formal sector. This suggests that, at least initially, benefits with relatively low replacement rates and short durations maybe most appropriate.