Unemployment among foreign-born young people has increased by more than three percent over the past year at the same time as it has declined by ten percent among Sweden-born.
"They are a vulnerable group with a fragile educational background which we have seen find it hard to take advantage of the upswing," said Tord Strannefors, forecasting director at the National Public Employment Service (Arbetsförmedlingen).
More than every fifth young person with an immigrant background lacks high school qualifications and twice as many get stuck in long-term unemployment in comparison with Sweden-born counterparts.
"This is serious. There is a risk that will be excluded from the labor market," Strannefors said.
Many also feel discriminated against because of their background.
"Sweden has great ambitions for integration. But there is nothing in practice," said one young job-seeker.
"Employers must get accustomed to having people with different backgrounds in the workplace. Many have never had it, they hire through their own networks and then it is only Swedes."
The image of the fragmented labor market is both alarming and of concern, according to Sweden's integration minister Erik Ullenhag.
"If you as a young and foreign-born do not secure a foothold in the labor market the risk is that you feel a very weak connection to society. You feel that that there is no future," Ullenhag said.
The reasons behind the increase in unemployment within the group is explained by the international crisis and economic downturn, Ullenhag said.
"We know that in a situation where the economy is declining, it is mainly young and foreign-born who are not able to establish themselves or remain in the workforce."
Ullenhag identified education and schools as having a key role.
"To break the cycle more investments are required. Secondary schools have a key role, as well as an apprentice system that will soon be launched in full," he said.
Ullenhag also said that a review of the system of income support (socialbidrag) could be required.
"This is a group that is likely to be dependent on income support and there we need to consider whether we can have a clearer line on jobs."