This paper examines determinants of labor market success among children of immigrants and children of native-born parents in Sweden. We use administrative data with information on class of origin, cognitive and non-cognitive skills, and educational attainment to study ethnic differentials in access to employment and adult earnings among males born in Sweden between 1965-1975 (N=355,734). We also construct indicators of social capital in terms of access to kin members who have established themselves in the labor market and residential segregation during childhood using neighborhood fixed-effects. We find persistent gaps in entry into employment among second-generation immigrants relative to natives, but we do no find ethnic disadvantages in earnings conditional on employment. Furthermore, differences in cognitive skills, personality traits and neighborhoods do not seem to matter for the employment gap, but differences in kin networks do play a role. These results suggest that children of immigrants still face barriers in attaining a stable entry into the labor market.