The Impact of Lockdown Policies on Social Capital: Evidence from Australia

This paper examines the impact of lockdown policies on social capital, using the 2020 lockdown in Victoria, Australia, as a natural experiment. Using panel data from the Household, Income and Labour Dynamics in Australia survey, we analyze five dimensions of social capital: Neighborhood Collaboration, Neighborhood Support, Community Participation, Friends & Family Support, and Friends & Relatives Interaction. We find that the lockdown significantly reduced social capital linked to interpersonal engagement, particularly Community Participation and Friends & Relatives Interaction, while increasing Neighborhood Collaboration and Friends & Family Support. Heterogeneity analysis reveals substantial variation across sociodemographic groups. Individuals with low educational attainment experience greater gains in Neighborhood Collaboration but a sharper decline in Friends & Relatives Interaction compared with college graduates. Additionally, foreign-born individuals show a significant decrease in Neighborhood Support. We further examine post-lockdown outcomes and find that the positive effects on Neighborhood Collaboration and Friends & Family Support persisted for at least two years, whereas the negative effects on Community Participation and Friends & Relatives Interaction had fully recovered. These findings highlight the uneven social consequences of lockdowns and the importance of targeted policy responses in future crises.