Abstract: Using administrative data from Sweden, we document labor market trajectories before and after the first recorded diagnosis of gender incongruence, which we use as a proxy for the initiation of gender-affirming care. We track employment, earnings, and economic self-sufficiency for transgender men and women before and after the first diagnosis of gender incongruence, using an event-study design to measure the changes in labor market outcomes relative to a matched cisgender sample. Prior to initiating gender-affirming care, transgender individuals already showed lower employment and earnings, and after treatment begins, the gaps widen significantly. Relative employment declines in the two years after initiating care and remains stable in subsequent years. Relative earnings decline as well, following the same pattern as employment. The decline is larger for transgender women than for transgender men. The widening of the gaps in labor market outcomes reflects two factors: i) declines in employment and earnings among transgender individuals who were employed when they initiated gender-affirming care, and ii) slow employment and earnings growth among transgender individuals who enter the labor market after initiating gender-affirming care. Obtaining gender-affirming hormones or surgeries and legal gender recognition is not correlated with outcomes for transgender women, but is correlated with smaller declines in relative employment and earnings for transgender men. Mechanism tests suggest a limited role for occupational sorting and firm characteristics, and changes in health explain only a small fraction of the observed declines in relative outcomes. The results highlight the economic vulnerability transgender individuals face during medical transitions.