In recent years, the Chinese government has set positive employment goals, signaling an increase in efforts to stabilize employment. Existing literature does not pay enough attention to the impact of taxation business environment optimization on regional employment. Based on the data of districts from 2010 to 2020 and the reform of tax-related government functions, this paper empirically tests the impact of taxation business environment optimization on regional employment by using the staggered DID method. The results show that the optimization of taxation business environment improves regional employment. Mechanism testing finds that the optimization of taxation business environment improves regional employment by promoting the entry of enterprises and increasing the investment in fixed assets of enterprises. Heterogeneity analysis shows that this effect is more pronounced in districts with a lower degree of marketization and a lower level of financial development, and the central and western regions. Further analysis verifies that the optimization of taxation business environment can expand the employment scale by alleviating financing constraints, reducing institutional transaction costs, and improving TFP.

The possible contributions of this paper are as follows: First, from the perspective of macro and micro integration, it systematically explores the impact of taxation business environment optimization on regional employment, enriching the relevant literature on the taxation business environment and employment. Second, it examines the employment stabilization effect of taxation business environment optimization at different levels based on macro and micro perspectives, deeply explaining the impact of taxation business environment optimization on macro and micro employment stabilization. Third, it not only provides new empirical evidence for evaluating the economic and social effects of taxation business environment optimization, but also contributes to the smooth progress of the current employment stabilization work of local governments in China.