Although many argue that residential segregation is related to selective migration, certainly in Sweden, this view has recently been somewhat challenged when a broader demographic analysis, the so-called demographic conveyer approach, has been used to study the segregation process. However, the number of studies and cases using the demographic conveyer approach to study segregation is limited. In this paper, we apply an elaborated demographic conveyer approach in a new context to describe and analyse the underlying sorting dynamics that over time cause residential segregation. To do so, we follow the individual’s socio-economic carriers, between 1990 and 2008 in three neighbourhoods that have become socio-economically weak. We compare the career outcomes of stayers, in-migrants and out-migrants, and by doing so, we draw conclusions about the underlying dynamics that cause socio-economic segregation. The analysis is conducted in a medium-sized Swedish city which has rapidly become highly segregated since the early 1990s, making it possible to basically follow the evolution of the current segregated situation. Our main conclusion is that the segregation process is due to migration, however, not to internal migration, but rather external immigration. The degree of segregation is highly related to institutional circumstances, since immigrants basically settle in dwellings owned by the public housing company. In our case, the public housing apartments are highly concentrated to the studied area. We also find a general improvement in socio-economic situations regarding both educational levels and unemployment levels for in-migrants, out-migrants and stayers. However, the relationship between the inflows and outflows changes essentially from a situation when the inflows improved the population’s socio-economic status to a situation where the reverse is true. This is accentuated when income is taken into account. The paper also shows that individuals moving away from a segregated neighbourhood, who do not end up in similar neighbourhoods in the city, have better socio-economic carriers than those who stay in one of the three neighbourhoods during the period.