By introducing the insider agreement, this paper considers a NK-DSGE model with hysteresis in unemployment, and analyzes the dynamic effect of unemployment hysteresis on China’s unemployment and its persistence. The research shows that the hysteresis not only alters the response of unemployment under exogenous shocks and unemployment persistence but also changes the steady state of unemployment. Further, we analyze the impact of different monetary policy mechanisms under the background of obvious existence of unemployment hysteresis and the results show that the hysteresis can almost not affect the stabilizing role of optimal monetary policy in the unemployment, however, under Evans rule, the hysteresis significantly affects the dynamic effect of the unemployment under exogenous shocks of monetary policy, the unemployment can not ease in short term but Evans rule still improve social welfare by comparing with standard monetary policy mechanism. Thus, Evans rule is helpful to the stability role of labor market by structural reform of labor market, by changing the administrative employment institution, by promoting the free mobility of labor and further by clearing institutional inducement of unemployment hysteresis.