The effects of social capital deprivation for wellbeing: Evidence from the Covid-19 pandemic

The paper explores the relationship between the Covid-19 pandemic, subjective wellbeing and social capital in the UK. I exploit the pandemic as a quasi-natural experiment of an exogenously induced reduction of social capital as an explanation of the frequently documented reduction in wellbeing during the pandemic period. Differently from the literature, results show that after the onset of the pandemic - when the imposition of restrictions to social interactions occurred - both mental health and life satisfaction substantially decreased, and this decrease was larger for the people who reported having higher pre-pandemic social capital. Results also show however that their wellbeing decrease was not high enough to fully overturn the wellbeing gap usually in their favour. This suggests that the positive effects of social capital for wellbeing are via at least two pathways: in-person social interactions and via the value of having social networks. These results contribute to the literature on the relationship between social capital and wellbeing, as well as the one on the effects of the pandemic for mental health and life satisfaction. Policy implications include investing in social capital to increase overall populations’ wellbeing; and, during epidemiological crises, facilitating online psychological support to hamper the negative effects of social isolation, and campaigning to encourage people to keep as much as possible in touch with loved ones and their communities via online social networks and online events to prevent a further degradation of the quantity and quality of social interactions.