Few public and social policy subjects have attracted as much attention as Affirmative Action Policy (AAP) in social sciences. AAP’s main aim is to eliminate or prevent past discrimination against disadvantaged groups and to enhance their position in society. Its role has become controversial around the world. In Saudi Arabia, despite changes and improvements in laws and strategies, over past decades, to tackle the age-old issue of native unemployment, the problem is still deeply ingrained in society. This research has investigated the role, effectiveness and consequences of AAP on Saudi labour market structure. The research has employed a pragmatic methodology over three phases of analysis. The first phase has been based on an interpretive paradigm, and been conducted through semi-structured interviews with labour market experts, to identify and understand the policy. The interviews have been analysed using a thematic analysis technique. The findings of this phase contributed significantly to the understanding of AAP’s legislative nature and role. Two different historical versions of AAP (pre- and post-2011) have been identified. The earlier version (pre-2011) was found to be a non-strategic and vague policy that made no real impact on natives’ employment, while the new version (post-2011) has been positive in increasing native employment (relatively), but it has been associated with serious unintended consequences due to its stricter enforcement. The second phase has been based on a positivist paradigm, and been conducted through time-series analysis (2004-2014), to examine policy effects on labour market structure. The results have indicated that, in addition to the continuing issue of the high inward flow of expatriates, AAP has failed to either improve the distribution of job opportunities across the country, or enhance structural issues with some occupations in the private sector. The third phase has also been based on a positivist paradigm, and was carried out using a survey (sent to over 1,000 participants) examining the policy’s socio-psychological effects on employees. The findings have suggested that employees tend to perceive AAP negatively. Mainly, the results reveal a strong correlation between AAP and all types of discrimination, both individual and institutional, and such a negative perception of discrimination has direct and indirect effects on employees’ intention to leave. The main contribution of this research is to provide much desired information on the AAP’s practice and approaches, in an interesting context. The research provides vital information about old and new AAP legislations in Saudi Arabia. Two frameworks have been developed, (with one being tested), to understand the policy effects from different perspectives. Importantly, the research shows how a strict form of AAP can have side effects on the beneficiary group and destabilise the labour market.

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