Extensive literature documents that high-tenure workers suffer persistent earnings losses when displaced. So far, no agreement has been reached on the underlying sources. This paper measures the relative importance of different sources of earnings losses within a structural lifecycle model of the U.S. labor market. The model jointly ex- plains worker mobility, job stability, and individual wage dynamics. We find that 30% of the estimated earnings losses are because of selection effects, 20% because of increased job-instability, and 50% because of lower wages. Decomposing wage losses further, we show that 85% stem from losses of match-specific skills. Worker-specific skill losses, as the most prominent explanation in the macroeconomic literature, are only of minor importance. We demonstrate that the sources of earnings losses matter for the macroeconomy by exploring the trade-off between opportunities to raise output and increased earnings losses. Joint with Philip Jung.