Social　insurance　premiums　(SIPs)　raise　labor　costs,　particularly　in　labor-intensive　firms.　The　growing　body　of　literature　has　examined　SIPs　and　labor　costs　in　the　context　of　declining　demographic　dividends;　however,　the　influence　of　these　factors　on　corporate　underinvestment　in　emerging　markets　remains　underexplored.　Using　data　from　A-share　listed　firms　spanning　2006-2016　and　a　difference-in-differences　methodology　within　China＇s　Social　Insurance　Law,　this　study　finds　that　SIPs　enhance　corporate　underinvestment.　Moreover,　operating　and　financing　costs　exacerbate　this　effect,　especially　for　state-owned　enterprises　and　firms　with　high　operating　pressure,　large　labor　recruitment,　and　low　artificial　intelligence　application.　Labor-intensive　firms　face　significant　challenges　stemming　from　operational　burdens,　underscoring　the　need　for　government　support　during　their　transformation.　This　study　advances　the　theoretical　and　empirical　discourse　within　the　fields　of　corporate　finance　and　labor　economics.