This research examines the impact of tax pressure on the labor investment efficiency of local firms and the underlying mechanisms.Our findings indicate that higher tax pressure positively influences labor investment efficiency.This effect is primarily achieved through two channels.First,firms under greater tax pressure are more likely to scrutinize redundant labor costs,leading to a significant reduction in excessive employment,which en-hances the efficient allocation of labor resources.Second,tax pressure encourages firms to prioritize cost-benefit analysis and improve the output efficiency of their labor inputs.By increasing unit labor productivity,these firms ultimately achieve higher labor investment efficiency.Heterogeneity analysis shows that the above effect is more significant in firms with a high proportion of low-skilled labor,non-state enterprises,more intense competition,and in re-gions with less political promotion incentives.