For this dissertation I studied personal identity formation among Finnish adolescents and young adults and its links with well-being, digital engagement and socio-economic circumstances, referring to occupation, incomes and key developmental transitions experienced in young adulthood. Experiencing a sense of identity, defined as coherence, direction and meaning in life, is critical for individuals’ psychological well-being and social integration. Sociological theory and studies suggest that maintaining a sense of identity has become more difficult than in the past, prolonging the task from adolescence well into adulthood. At the same time, adolescents and young adults have new tools and are developing new competencies to manage increasing contingency. Three studies were conducted, where the Dimensions of Identity Development Scale (DIDS) was employed to measure multiple aspects of exploration and commitment within the identity domain of general future plans. Study 1 (N = 751, Mage = 24.6, 60.3% women) showed a relatively high prevalence of identity diffusion among Finnish young adults. In addition, positive identity development was associated with strong well-being and both past and present economic status. Study 2, conducted among a high-school sample (N = 932, Mage = 17.1, 69% women), showed that identity formation was related to digital practices and competencies. Study 3, in a longitudinal sample of young adults (measured at ages 24 and 29; N = 854, 63% women), showed that identity exploration and commitment processes decreased during this life-phase. Moreover, these changes were moderated by developmental transitions such as becoming a parent and achieving education-related full-time employment. Further, parenthood was the variable most strongly linked with positive identity development. In conclusion, the results suggest that identity is a major challenge for Finnish young adults still in their mid and late twenties, with commitment issues being more enduring and dynamic than hitherto recognised. A sense of identity, in this case certainty regarding one’s future plans, remains in flux depending on the individual’s social and economic circumstances. Cultural context may further moderate how identity uncertainty is tolerated. Similarly, digital engagement operates as an extension of mind and advanced digital competence (cf. digital literacy) seems to support positive identity development. Keywords: personal identity, prolonged adolescence, person-oriented approach, psychological well-being, digital engagement, developmental tasks