Club Membership, Social Capital Formation, and Employment Outcomes: Evidence from Australia

This paper looks at the role of Individuals’ membership in clubs and associations in promoting social connections and building social capital in Australia. Using panel data from the Household, Income and Labour Dynamics in Australia survey, around one-third of working-age Australians are found to be club members, with membership rates declining over this century. A principal component analysis of a set of variables relating to people’s social interactions identifies two distinct forms of social interaction: connectedness with family, friends, and neighbours, and civic engagement in community organisations and causes. Club membership is positively associated with both forms of social interaction and does appear to provide a form of social capital in the sense that it is independently associated with success in securing employment, although we cannot empirically establish that relationship as causal. While the two forms of social interaction appear to align with Putnam’s concepts of ‘bonding’ and ‘bridging’ social capital, their effects on labour market outcomes call for a more nuanced interpretation. We propose that civic engagement may represent a form of social activism which crowds out job search connections and activities.