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The influence of globalization on psychological functioning is examined. First, descriptions of how globalization is occurring in various world regions are presented. Then the psychological consequences of globalization are described, with a focus on identity issues. Specifically, it is argued that most people worldwide now develop a bicultural identity that combines their local identity with an identity linked to the global culture; that identity confusion may be increasing among young people in non-Western cultures as a result of globalization; that some people join self-selected cultures to maintain an identity that is separate from the global culture; and that a period of emerging adulthood increasingly extends identity explorations beyond adolescence, through the mid- to late twenties.

Globalization has existed for many centuries as a process by which cultures influence one another and become more alike through trade, immigration, and the exchange of information and ideas. However, in recent decades, the degree and intensity of the connections among different cultures and different world regions have accelerated dramatically because of advances in telecommunications and a rapid increase in economic and financial interdependence worldwide. For example, exports as a proportion of world gross domestic product grew from 8% in 1950 to 26% by 1998 (“The Battle in Seattle,” 1999), and international travel has increased by 700% since 1960 (Held, 1998). Consequently, in recent years, globalization has become one of the most widely used terms to describe the current state of the world.

Globalization encompasses a wide range of issues and phenomena. In the proliferation of recent books on the topic, the focus has been mainly on economics (e.g., Friedman, 2000; Gray, 1998), but books on globalization have also addressed issues such as the influence of globalization on urban life (e.g., Sassen, 1998) and on cultural practices (e.g., Appadurai, 2000; Giddens, 2000; Tomlinson, 1999). However, psychology’s contribution to an understanding of globalization has been mostly indirect. Psychological theory and research on acculturation, identity, and other topics have implications for the effects of globalization,...