The Impact of Cultural Orientation on the Emergence of Entrepreneurship: Evidence from The Great Resignation in the United States

Can cultural orientation be at the root of new labor and entrepreneurial trends triggered by the Covid-19 shock in the US? The frontier conditions shaping early US history are known to foster traits such as self-reliance, inventiveness, and individualism, all of which may be influential drivers of changes in labor supply decisions under unexpected circumstances. Using novel measures developed by Bazzi et al. (2020) on the frontier experience of US counties/ states and up-to-date information on job quits and new business applications, I argue that residents in locations with wider frontier experience are more likely to quit their jobs and become self-employed following this health shock. These findings hold even after considering alternative explanations relying on resistance to vaccination mandates and the impact of government transfers during the pandemic. These results contribute to the literature on the long-run effects of culture on economic outcomes by adding a labor supply dimension to the analysis. They also provide a cultural perspective on the emergence of the so-called Great Resignation phenomenon in the US.