Our first pandemic year: HILDA survey reveals how Australians were affected by the start of COVID-19

Woman and her two children looking at a tablet on the couch
The latest report of the study uses data up until 2020 to reveal the impacts of the COVID-19 pandemic on Australian households. Image: Alexander Dummer\unsplash

A new report reveals how the first year of the COVID-19 pandemic impacted Australians, as many of us received government income support, worked from home under lockdown, watched more TV and worried over an uncertain future.

The Household, Income and Labour Dynamics in Australia (HILDA) Survey, conducted by the Melbourne Institute, is the country's only nationally representative longitudinal household study following the same group of Australians over their lifetimes. The latest report of the study, released today, uses data up until 2020 to reveal the impacts of the COVID-19 pandemic on Australian households.

The report shows inequality declined significantly in Australia with the largest fall in the survey’s 20-year history, as governments provided unprecedented emergency income support and other measures to respond to the growing pandemic.

Professor Roger Wilkins, the report lead author, said: “The results offered important insights into the levels and impact of assistance we provide to the most vulnerable members of our society.”

The impact of COVID-19 on households, jobs, finances and consumption habits

Just under half of Australians (45 per cent) said the pandemic made their lives worse. Unemployed people, people with disability or mental health concerns, and people who are extroverted were the most likely to feel their lives were much worse because of the pandemic.

Melbourne – under protracted lockdown restrictions at the time of the 2020 survey - correspondingly had the highest proportion of people reporting life under the pandemic was much worse—33.1 per cent, compared with 25.4 per cent of people in non-urban Victoria, and 16.9 per cent nationally. Residents of Western Australia were the least likely to report life had gotten much worse due to the pandemic.

The onset of the COVID-19 pandemic saw the biggest rise in job insecurity in 20 years, as nearly one in 20 workers (4.5 per cent) reported losing their job nationally, with even more in Victoria (5.3 per cent). Almost one in ten Australian workers (9.6 per cent) were stood down without pay.

More younger people lost their job than other age groups, with 7 per cent of working 15-24-year-olds reporting being let go because of COVID. Despite this, younger people were less likely to report life being much worse under the pandemic than older age groups.

Housing-related finances were a challenge for many, as people in need reported that the banks were more generous than landlords. Of the 11.2 per cent of Australian renters who tried to suspend rent payments, around half (5.4 per cent) were refused. Victorian renters – where lockdowns were protracted – were the least successful with their requests. Meanwhile, fewer than one in 10 (1 per cent) of mortgage holders seeking to suspend mortgage payments (11.3 per cent) were refused by their lenders.

Workplaces rapidly shifted their thinking around flexible work. Before 2020, only 6 per cent of Australians reported working mostly from home, and a vast majority of those workers (80 per cent) were self-employed.

Before 2020, around 25 per cent of Australians reported undertaking paid work from home some hours each week. As COVID-19 took hold in 2020, this rose to 35 per cent of people. Considering the big change in where paid work was undertaken, reported job satisfaction barely changed.

While most Australians didn’t think they were drinking or smoking more regularly during the first pandemic year, spending patterns showed otherwise, with the report noting an 8 per cent increase in spending on alcohol and a 15.6 per cent rise in spending on tobacco in 2020.

Compliance with government introduced pandemic restrictions was very high – particularly in Victoria. Around 85 per cent of Victorians reported staying home in line with the rules, and practised social distancing. In the rest of the country, where lockdowns were not in place at the time of the survey, people were considerably less likely to report staying at home and social distancing.

For Victoria, time spent commuting between home and work dropped significantly (24 per cent for men and 28 per cent for women) and time in front of our screens surged, with almost half of Victoria reporting watching more TV.

Nationally, people spent more time outdoors doing things like gardening, in Victoria up 12 per cent for men and 16 per cent for women, and in the rest of Australia up 5 per cent for men and 7 per cent for women.

Professor Wilkins noted the interesting COVID-related stories that would continue to emerge in future years of HILDA, and said: “The study will be able to illustrate how those impacted by COVID through job loss, extended lockdowns and adverse physical and mental health experiences rebound and explore what supports resilience, or alternatively, the barriers they face to recovery.”

Australia's worsening wellbeing

The worsening national trend of declining mental health was accelerated by the onset of COVID-19, with the sharpest falls seen in our younger age groups, aged 15-24 and 25-34.

Working from home and the loss of social support and connections were major factors responsible for the worsening mental health of Australians.

Senior Research Fellow Dr Ferdi Botha said Victorians reported lower average mental health scores in 2020 than the rest of Australia.

“Young people, while more likely to report poor levels of mental health, were the least likely to report life being much worse due to the pandemic, which suggests this cohort has more resilience and optimism than they are sometimes given credit for,” Dr Botha said.

Women reported lower average mental health than men (in 2020 women’s mean mental health score was 69.2, compared to men’s 72.5 on a 0-100 sale), and Australians living with children under four years of age and who lived in flats and other non-detached houses fared worse.

“Having a larger home with outdoor space seems to have limited the adverse mental health effects of lockdowns,” Dr Botha said.

Relationships in a pandemic year

More Australian couples reported the COVID-19 pandemic improved their relationship (19.1 per cent) than those who said it worsened it (6.6 per cent).

“Suddenly we were working from home, isolated from our larger communities, without being able to take our usual breaks from each other. Many people have experienced a deep restructuring of their priorities and needs, and have found new satisfaction in their relationships,” Senior Research Fellow Dr Esperanza Vera-Toscano said.

Education: Interrupted studies, schooling in the home

Almost one third of tertiary students (30 per cent) reported an interruption of their studies due to the COVID-19 pandemic, while almost half of Victorian students (49 per cent) experienced an unforeseen interruption.

More than half of parents helping home-school their primary school aged children (50-58 per cent across government and non-government schools) reported learning during the COVID-19 crisis was worse for their children.

Despite the challenges, parental stress was only slightly higher than it was before the COVID-19 pandemic (22.6 per cent in 2020, compared with 21.2 per cent in 2019). Interestingly, for mothers, the proportion reporting high levels of parenting stress was largest among those who had a child between the age of 5 and 8—almost 30 per cent of mothers.

Financial literacy declines

Financial literacy – the knowledge necessary to make sound financial decisions – declined in Australia between 2016 and 2020. The declines were larger for women than men, and greater for people aged under 35 than older people.

About the HILDA Survey

The HILDA Survey follows the story of the same group of Australians over the course of their lives. Launched in 2001, it now tracks more than 17,500 people in 9500 households and grows as families expand.

The HILDA Survey collects information annually on a wide range of aspects of life in Australia, including household and family relationships, childcare, employment, education, income, expenditure, health and wellbeing, attitudes and values on a variety of subjects, and various life events and experiences.

It is funded by the Australian Government Department of Social Services and is managed by the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne.

Professor Roger Wilkins, Dr Ferdi Botha, Dr Esperanza Vera-Toscano and Prof Mark Wooden are available for interviews.