The number of immigrants in Sweden has been increasing over the years and the share of foreign-born individuals has been unequally distributed across municipalities in Sweden. One of the reasons for this are the laws concerning refugee settlement that have been implemented in Sweden over the years. For instance, between 1987 and 1989 refugees were assigned to certain municipalities instead of letting them choose where they would like to be located, whereas in 2006-2010 refugees who could not find their own housing were placed in municipalities where there was available housing, that being mostly outside bigger cities. Decisions concerning where a foreign-born individual is placed can impact their ability to find employment in that region. Therefore, we assume that these people make a strategic choice regarding which municipality they prefer to be living in. Regional differences such as housing and labour market integration programs may also impact the attractiveness of certain regions and, in turn, their labour markets. The purpose of this thesis is to investigate whether there is a relationship between immigration and unemployment across municipalities in Sweden and the research is based on Sweden’s 290 municipalities using a cross-sectional approach. In addition we account for other types of immigrants besides refugees such as students, labour-immigrants, relatives of the refugees and other foreign-born individuals.  The results obtained show that there is a relationship between immigration and unemployment across municipalities in Sweden year 2017. We end with discussing the results in connection to previous studies, as well as with limitations of this study.