This paper investigatehh ow children of immigrants fromTurkey are integrated into Swedish society. The educational achievements and labour market outcomes of this group are compared with the performance  of the offspring of native.born parents. The aim of the study is to explore whether we can observe a tendency towards 'downwards mobility' among young people of immigrant background in Sweden and thereby provide reflections on the existing fomulationof the 'segmented assimilation' theory.Findings show that descendants of immigrants seem not to be in the process of downward assimilation, that is social exclusion and therefore formation of a distinct' underclassin Sweden. The concept of 'subordinate inclusion' is a more appropriate description of the experiences of children of immigrants.