Abstract: Facing the same labor shock through imports from China, we show that men and women make different adjustments in labor market and family that result in significant gender inequality in the long-run. The gender gap is driven by the female biological clock. Using population registers and matched employer-employee data from Denmark, we document that especially women in their late 30s, towards the end of their biological clock, decide to have a baby as the shock causes displacement. High-earning women in leadership positions and women needing to acquire new human capital are central to this because their new employment would require particularly high investments that are incompatible with having a newborn in the short time remaining on the biological clock. While children penalize women in the labor market, we show that due to the biological clock an otherwise gender-neutral shock leads to a gender gap in the labor market.
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