and engage with written texts in personal, work-related, societal, and educational contexts (PIAAC Literacy Expert Group, 2009).

We estimate the regression for all workers, and two main subsamples: workers in offshorable and nonoffshorable occupations. We apply the allocation proposed by <u>Blinder and Krueger (2013), see Table A3 in</u> Appendix A for details. In all worker-level regressions, standard errors are clustered at the country-sector level.

# b. Pooled sample regression results

We start by regressing worker-level RTI against backward and forward GVC participation at the country-sector level and a set of controls (see econometric model, 2) in the pooled sample of 47 countries. Overall, we find no correlation between backward GVC participation and the average RTI, while a higher forward GVC participation is associated with a higher RTI of workers. The latter correlation decreases with rising development levels, as indicated by the negative interaction term between GVC participation and GDP per capita (Table 1, column 1). These findings confirm our intuition: workers in higher-income countries perform fewer routine-intensive tasks. Hence, a higher forward GVC participation in such country settings captures higher value-added tasks such as R&D rather than repetitive upstream tasks as would be the case in commodity-exporting countries.

However, the relationship between GVC participation and the RTI of workers may differ between types of occupations. To shed light on this hypothesis, we divide the sample into offshorable and non-offshorable occupations, using the preferred classification proposed by Blinder and Krueger (2013). In line with our assumption, the correlation between these occupational groups differs. We find no correlation between GVC participation and RTI among workers performing non-offshorable occupations (Table 1, column 2). However, among workers in occupations classified as offshorable, higher backward and forward GVC participation is linked with a higher average RTI (Table 1, Columns 2 and 3).

As backward and forward GVC participation measures are standardized within the sample, the larger (in absolute terms) coefficient of backward GVC participation suggests this variable’s relatively greater importance relative to forward GVC participation.<sup>9</sup> The worker-level RTI is standardized with the United States mean and standard deviation, to provide a reference point and comparability with the widely used (Acemoglu & Autor, 2011) RTI measure based on the US O*NET data. The interpretation would be the following. An increase in backward (forward, resp.) GVC participation by one standard deviation is associated with a rise in worker-level RTI by 0.079 (0.053, resp.) the US standard deviations.

The negative interaction terms with GDP per capita for both GVC measures imply that the relationship between GVC participation and RTI weakens with countries’ development levels. We provided the rationale for this finding in the case of forward GVC participation under the overall findings in the previous paragraph. Similarly, higher backward GVC participation in high-income countries captures more high-value added worker tasks – even in the assembly stage – while in lower-income countries, those tasks tend to be more repetitive (think of technician operating machines in the former versus assembly line workers in the latter). For example, in Ecuador (relatively low GDP per capita, about 1 log point below the sample average), one standard deviation higher backward GVC participation among workers performing offshorable occupations is associated with RTI higher by 0.133. In contrast, in Canada (relatively high GDP per capita, about 1 log point above the sample average), it is associated with RTI higher by only 0.025. Considering that backward GVC participation in both countries is

> 9 As a robustness check, we run models for backward and forward GVC participation measures separately, rather than combining them in one joint regression, and obtain similar results (Table 1A, Panel A in Appendix A).

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