<p>This paper examines how reduced employer-borne social security contributions affect firms’ pollution emissions, using the quasi-natural experiment of China’s social security collection reforms as the identification strategy. We find that the reforms increase pollution emissions through the decrease in employer social security contributions. By lowering labor costs, the reforms encourage firms to substitute low-skill labor for capital investment, technology adoption and technological innovation. The effects of collection reforms on firms’ pollution emissions are more pronounced for highly labor-intensive firms, non-SOEs, and firms with limited cost-transfer capability. Our findings highlight that, despite reducing short-term financial burdens, the reforms may unintentionally steer firms toward more pollution-intensive development paths.</p>