Individualism During Crises

Individualism has long been linked to economic growth. Using the COVID-19 pandemic, we show that such a culture can hamper the economy's response to crises, a period with heightened coordination frictions. Exploiting variation in US counties' frontier experience, we show that more individualist counties engage less in social distancing and charitable transfers, two important collective actions during the pandemic. The effect of individualism is stronger where social distancing has higher externality and holds at the individual level when we exploit migrants for identification. Our results suggest that individualism can amplify economic downturns by exacerbating collective action problems