Does high social insurance cost discourage firm investment and therefore impede real economy growth? This paper empirically tests the impact of social insurance cost on firm investment using Chinese industrial enterprises data，and chooses the proportion of theelderly of city as instrumental variable because of endogeneity problem in econometric regression. This paper finds that the rise of a standard deviation in social insurance cost will reduce investment by about 3. 3% ，which can explain 6. 4% variance of investment and is strong in economic significance. This paper also explores the transmission channels of social insurance cost change to firm investment，and finds that the three main channels are labor cost channel，TFP channel and financial constraints channel. The above results suggest that policies of cutting down social costs could stimulate firm investment and promote regional economic development.