This study analyses whether ethnic segregation leads to social isolation and lack of access to valuable informal channels into the labour market. We use a survey of Swedish-born young adults in Stockholm, whose parents were born either in Turkey (Stratum T) or in Sweden (Stratum S). Stratum T was randomly sampled, whereas Stratum S was sampled according to the residential distribution of Stratum T. Our results show that persons in Stratum T use informal contacts in order to find employment more often than Stratum S. Living in immigrant-dense areas increases the likelihood of finding employment through informal contacts. For Stratum T, co-ethnic contacts are more important than other contacts, in particular if they are neighbours. Access to ethnic networks and the use of ethnic contacts in the labour market differ between persons of Turkish, Kurdish and Assyrian/Syriac backgrounds. In contrast to the isolation thesis, this study shows that young adults in immigrant-dense neighbourhoods have access to and benefit more from informal channels in order to find ways into labour market.