The resolution of employment predicaments significantly hinges on market dynamism, and market integration is paramount for stimulating such dynamism. Hence, this paper addresses the deficiency in microanalytical perspectives within the context of the current development pattern of “dual circulation” and the concurrent goal of “promoting high-quality full employment”.

This paper takes the expansion of the Yangtze River Delta Urban Economic Coordination Council as a quasi-natural experiment and finds that market integration significantly enhances enterprises’ employment absorption capacity. Heterogeneity analysis indicates that labor-intensive enterprises and non-heavy-polluting enterprises exhibit a more pronounced effect in increasing employment. Mechanism testing reveals that market integration reduces enterprise costs through alleviating financing constraints, reducing transaction costs, and lowering entry barriers, thus promoting enterprises to expand production scale and new entrants, thereby increasing labor demand. Meanwhile, market integration facilitates better CSR practices, thereby increasing the attractiveness of enterprises to the labor force. Expansion analysis demonstrates that market integration effectively increases the probability of youth employment while also enhancing the share of labor income.

The marginal contributions of this paper are as follows: First, in terms of research perspective, it addresses the deficiency in microanalytical perspectives within the context of the current development pattern of “dual circulation” and the concurrent goal of “promoting high-quality full employment”. Second, in terms of research content, besides examining the impact of market integration on enterprise employment scale, it also investigates the effect on youth employment, wage levels, and the share of labor income, supplementing new evidence from the labor market for relevant studies on market integration. Third, in terms of practical applications, it provides theoretical support for accelerating the construction of a unified national market and more effectively promoting high-quality full employment by drawing on and disseminating the experience of the integration of the Yangtze River Delta.