The Pew Research Center released a study today on the growing “age gap” in economic well-being. Based largely on Census’ Survey of Income and Program Participation, the study compares household income trends, by age, from 1984 to 2009.

The main result is that those households headed by someone 65 and older did pretty well for themselves, while those under 35 did pretty badly. The number one driver of this trend? The housing bubble. Seems the elderly, in general, purchased long before the bubble and didn’t take a lot of equity out, while the young bought near the peak and took a bath.

The paper’s results suggest two policies messages to me (perhaps it will suggest different ones to you): given how well most of the elderly have done, relative to younger households, where’s the justice or even need for the young to continue to subsidize the elderly via medicare, social security, etc. These trends in wealth provides considerable justification for means-testing these programs. Secondly the Federal Reserve’s constant attempt to make us wealthier via a series of asset bubbles is actually adding to income inequality. Asset booms make those with assets, usually older and wealthier households, even more wealthy while doing little or even real harm to those without assets. If you really want to see more equal wealth, then demand that the government stop trying to push up home prices.

Of course there are other factors that also drive the difference in age wealth trends. Recall the data is for households, so the declining household size (rise of single parents, delay of marriage) will generate difference across cohorts.