Abstract
Abstract Facing the same labour demand shock through imports from China, we show that men and women make different labour market and family adjustments that result in significant long-run gender inequality. 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 who need to acquire new human capital are central 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 labour market, we show that due to the biological clock an otherwise gender-neutral shock leads to a gender gap in the labour market.