Abstract: Against the backdrop of mounting pressure to stabilize employment, the employment effects of the digital economy have attracted growing attention. However, limited research has examined the impact of digital government development on firm-level labor demand. Using panel data of A-share listed firms in Shanghai and Shenzhen from 2011 to 2021, this study exploits the "National Pilot Program of Information Benefiting the People" launched in 2014 as a quasi-natural experiment representing the digital transformation of government governance, and employs a difference-in-differences (DID) approach to investigate the effect of enhanced digital governance capacity on corporate employment. The results indicate that the policy significantly increases firms’ employment levels, suggesting a stabilizing effect on employment. Mechanism analysis shows that digital government development promotes corporate employment by facilitating firms’ digital transformation, reducing perceived economic policy uncertainty, and improving operational stability. The heterogeneity analysis reveals that the employment-stabilizing effect of the policy is primarily concentrated in firms located in eastern regions, cities with higher integrity efficiency, and capital- and technology-intensive industries. Based on the above findings, corresponding policy recommendations are proposed to further promote the coordinated advancement of public service digitalization and employment stabilization.

Key words: digital governance, digital government, information benefiting the people, employment stabilization