Many developed countries, e.g. the UK, Germany, and Sweden, use or have used settlement policies to direct the inflow of new immigrants away from immigrant dense metropolitan areas. We evaluate a reform of Swedish immigration policy that featured dispersion of refugee immigrants across the country, but also a change in the approach to labour market integration. We focus exclusively on how immigrants fared because of the policy. The results indicate that immigrants experienced fairly substantial long-run losses because of the policy. We also find that only a smaller share of this effect was associated with the dispersion of immigrants across regions. The larger share of the impact appears to stem from a common component that affected immigrants regardless of where they were located. Our somewhat speculative reading of this result is that it can be traced to a shift in emphasis of integration policy from a policy focusing on labour market assimilation to one of income support.