ObjectiveThis paper studies the mediating and interactive effects of social capital on psychological capital and the feeling of happiness from the impact of COVID-19. Since its emergence, the COVID-19 pandemic has taken a toll on people’s mental health and affected their hopes for the future. Lifestyle and economic conditions have also been affected and have subsequently impacted people’s sense of confidence in life. This could increase the likelihood of many people developing mental health issues, such as anxiety or depression. Therefore, it is vital to study the influence of psychological capital and social capital on people’s subjective psychology and happiness experiences.Materials and MethodsUsing an ordered probit model, this paper studied the independent influence and interaction between psychological capital and social capital on people’s happiness. The ordered probit model was chosen because subjective well-being (SWB) is an ordered variable. We further used structural equation modeling (SEM) to study the mediating effects of social capital on psychological capital and happiness.ResultsThe regression results showed that both psychological capital and social capital were significantly positively correlated with happiness when controlling for other factors. In addition, psychological and social capital significantly interacted, in which the psychological capital promotes the effect of social capital on happiness. Moreover, the effect of psychological capital on happiness was greater than that of social capital, demonstrating that happiness is more greatly influenced by subjective psychological experience. The interaction coefficient of psychological and social capital was also significant, showing that the two have mutually reinforcing effects on happiness. Finally, health, income class, real estate, stranger trust, age, and urban household registration had significant positive effects on happiness, while the view of money, being female, education had a negative relationship with happiness. The SEM results showed that the mediating effect of psychological capital on happiness was partly transmitted through social capital: the total effect of psychological capital on happiness was highly significant (p < 0.0001), as was the total effect of social capital on happiness (p < 0.0001); however, the coefficient for psychological capital was greater than that for social capital. Through heterogeneity analysis, we found that the relationship between psychological capital, social capital, and happiness was significantly positive in each sub-sample group. There was also a significant interaction between psychological and social capital for men, women, urban and rural residents, and higher education background sample groups. However, the interaction was not significant in the sample group without higher education. In addition, the relationship between the happiness of rural residents and their educational background and gender was not significant.ConclusionWe found that psychological and social capital have significant positive relationships and effects on happiness. Psychological capital demonstrated both direct and indirect influences on happiness, and further strengthens the influence of social capital on happiness. These results support a scheme to emphasize psychological support during the COVID-19 pandemic period to enhance the mental health of citizens.