Research consistently finds that older workers tend to lose more than younger ones, those with less education more than those with more, and women more than men. But averages can be misleading. Our recent IZA Discussion Paper introduces a new framework that goes beyond average effects to recover the full distribution of earnings losses after job displacement due to firm closures, providing a richer understanding of who is most affected and why.

The distribution of losses is highly skewed: a small share of workers suffers catastrophic losses, which heavily influence the average. Even among workers with similar backgrounds, earnings losses can vary dramatically.