Abstract

This study investigates the relationship between educational attainment and homeownership in Canada, assessing whether gains in human capital have translated into
higher ownership rates amid rising housing costs. Using microdata from the 2001 and 2021 Canadian Census Public Use Microdata Files (PUMFs), the analysis combines a pseudo-panel framework with survey-weighted regression models, Oaxaca–Blinder decompositions, and a control function approach to account for unobserved earnings-
related factors. The results show that higher education is consistently associated with a greater probability of homeownership, with the relationship strengthening over time.
Counterfactual predictions suggest that, under 2001 structural conditions (that is, applying coefficients from 2001 regressions to 2021 covariates), 2021 homeownership rates would have been lower than observed, indicating an increased effect of returns to education in the housing market. Decomposition results reveal that most of the education-based gap in homeownership is structural rather than compositional, implying that differences in the returns to characteristics drive disparities. These findings underscore the need for housing affordability policies that complement human capital development to ensure education-driven income gains are not undermined by structural market constraints for Canadians.