Technical and Vocational Education and Training (TVET) and Quality of Economic Development (QED) in China: Based on Panel Threshold Regression

We examine how Technical and Vocational Education and Training (TVET) shapes the Quality of Economic Development (QED) amid rapid digitalization and the green transition. Using a balanced panel of 30 Chinese provinces (2013–2023), we construct a multidimensional, entropy-weighted QED index and combine two-way fixed effects with an instrumental-variables approach (regional graduate flows) to reduce endogeneity concerns. Mechanisms are traced via sequential-equation mediation with bias-corrected bootstrap inference, and funding nonlinearity is tested with a panel threshold model. We find a positive, robust TVET effect on QED. Two channels, entrepreneurial vitality and industrial structure upgrading, mediate a meaningful share of the impact. Effects are heterogeneous across space, with the strongest in the eastern provinces, moderate in the western provinces, and not statistically significant in the centre. Per-student funding exhibits dual thresholds: returns are negligible below the first cut-off (≈¥16,000) and rise sharply above the second (≈¥17,000), which helps explain regional disparities. Using established methods applied consistently across a long provincial panel, this study quantifies the strength and channels of the TVET–QED relationship and identifies funding levels associated with differential returns.