Language proficiency and homeownership: Evidence from U.S. immigrants

In this paper, we deliver the first causal evidence on the relationship between immigrant host-country language proficiency and homeownership. Using an instrumental variable strategy, we find a substantial positive impact of language skills on the propensity to own a home and the quality of housing among immigrants in the United States. While this effect is mediated by household income, our estimates also speak in favor of a direct language effect. Suggestive evidence further indicates that part of this effect may be driven by discrimination. Our results highlight the importance of host-country-specific human capital and, in particular, language proficiency for socio-economic assimilation in housing markets. • We provide first causal evidence on the relationship between immigrant host-country language proficiency and homeownership using an instrumental variable strategy. • Using nationally representative data on immigrants in the U.S., we find that better language skills significantly increase the likelihood of owning a home and lead to higher housing quality. • While household income mediates part of this effect, our results suggest also a direct effect of language proficiency on homeownership. • Suggestive evidence indicates that discrimination may partially explain the relationship between language skills and housing outcomes. • Our findings highlight the role of host-country-specific human capital in shaping immigrants’ housing market integration.