Dear all,

Perhaps a very basic question, but all the online resources I have looked at so far give me a different answer to the following question.

In a linear probability model, how should the coefficient on a dummy independent variable be interpreted? For instance, say we have the model

Yi=a+b1Male+b2 Xi+ui

where Y is 1 if the individual participates in the labour market, 0 if not and Male is a dummy that's 1 if the individual is male, 0 if female. Let's say the coefficient b1 is 0.10. Does this mean that being a man increases the probability to be in the labour force by 10 percent or by 10 percentage points (compared to being a woman)?

I think it should be 10 percentage points, but in many lectures, they speak of 10% .

Kind regards!