Ethnic disparities in the transition to home ownership

• We estimate a discrete-time duration model using longitudinal register data.
• A non-linear decomposition method is used to examine the size of ethnic gap.
• The gap in transition to home ownership is the highest for Moroccans.
• The estimated gap for Surinamese is entirely explained by their unfavorable characteristics.

This paper examines ethnic disparities in the transition to home ownership using longitudinal register data from the Netherlands. The study performs a discrete duration model to account for individual and parental background and neighbourhood conditions. Subsequently, the size of explained variance in the home ownership gap between Dutch and ethnic minority groups is estimated using the Oaxaca–Fairlie non-linear decomposition method. The analysis indicates that the home ownership gap is the highest for Moroccans (0.07) of which only 0.042 is explained by the observed characteristics. For Turkish residents, 0.043 of the total 0.046 gap is explained by their background characteristics. The estimated transition rate to home ownership for Surinamese migrants would have been slightly higher than for Dutch residents if they had the same characteristics as Dutch residents. Western migrants have the smallest gap (0.024), of which 0.021 is explained by their observed characteristics.