Abstract:The gross social security contribution rates level is in a dilemma. The article researches how social security contribution structure affects the employment if the gross social security contribution is invariable. The theory model finds that the change of contributions structure will affect the nominal wage, employee’s effort and unemployment rate. The China’s reform experience since the early 1990’s provides the data for empirical study. The result of simultaneous equations econometric model indicates that, increasing employee’s contribution rates will leads to the lower employee’s effort and employment rate. The policy recommendations is that increasing employer contribution rate will improve the employee’s effort and employment rate.