Back to Normal? The Enduring Effects of COVID-19 Lockdowns on Wellbeing

We investigate the immediate and longer-term impacts of COVID-19 lockdowns on overall life satisfaction and eight domains of subjective wellbeing, addressing the lack of evidence on whether these effects persist after lockdowns end. Leveraging quasi-natural variation in the timing and duration of local lockdowns across Australia and using long-horizon individuallevel panel data spanning the pre-pandemic, pandemic and post-pandemic periods, we employ individual fixed-effects models with time and location fixed effects to identify the causal effects of lockdowns. Our results show that lockdowns substantially reduce overall life satisfaction and satisfaction with employment opportunities and community, while increasing satisfaction with free time. These effects are strongest closer to the lockdown period and diminish over time. The effects are also non-linear, with most wellbeing outcomes affected only when lockdown exposure exceeds approximately two months in the preceding year. While effects on free time and community satisfaction are short-lived, negative effects on overall life satisfaction and satisfaction with employment opportunities persist for up to four years. We also identify delayed negative effects on satisfaction with financial circumstances, home, neighbourhood, and health, alongside a delayed positive effect on personal safety satisfaction. Heterogeneity analysis reveals larger effects among younger individuals, positive immediate effects on financial satisfaction only among lower-income households, and contrasting effects on health satisfaction across genders. These findings highlight the importance of considering lockdown duration and longer-term wellbeing effects in future pandemic responses.