Ecological restoration is closely related to socio-economic development. The implementation of the Grain for Green Project will affect socio-economic situations. The contradiction between the cultivated land and afforestation is an urgent problem to be solved. Clarifying the relationship between the Grain for Green Project and social economy is the basis for realizing the coordinated development of ecological protection and socio-economic development. This study reveals the relationship between the Grain for Green Project and social economy in northern Shanxi Province by constructing the system dynamics model. In this study, the contradiction between the cultivated land and afforestation is the premise of parameter conversion, four scenarios (continuous grain for green mode, low-speed grain for green mode, cultivated land protection mode, and intermittent grain for green mode) were established by changing the rate of cultivated land area, afforestation area and the investment coefficient of afforestation. The study also illustrated the impacts of four scenarios on social economy. The results showed that (1) Grain for Green Project had a positive impact on the social economy. In each scenario, the rising of socio-economic variables was different. (2) Although the forestry output value grew the fastest under the continuous grain for green mode, it inhibited the future socio-economic development. Socio-economic variables were the lowest under the continuous grain for green mode. Low-speed grain for green mode was more conducive to the harmonious development of ecology, society and economy. Socio-economic variables such as GDP and grain yield were higher under low-speed grain for green mode; Cultivated land protection mode could obviously increase the grain yield in the initial stage of simulation. However, it had more positive impact on NDVI and vegetation carbon sequestration in the long run. (3) According to the development of low-speed grain for green mode, the GDP of the northern Shanxi would reach 1841.290 billion yuan in 2035, with an averagely annual growth rate of 9.34%. Grain yield would reach 8.29 million tons. Through the comparison of the four scenarios, low-speed grain for green mode could not only coordinate the contradiction between the cultivated land and afforestation, but also effectively balance the relationship between socio-economic development and forest ecological construction.