In this paper we assess the short‐  and mid‐term effects of two cash transfer
programmes in Uganda in terms of child underweight, school attainment, and the
monetary returns to these indirect effects. Using a micro‐simulation approach we test
how the scale‐up of these pilot interventions could affect human capital indicators and
income growth. We first use panel data to estimate the links between income, child
health, and school attainment. Thereafter we insert the estimates in a micro‐simulation
model to predict how cash transfer programmes could generate income returns through
higher education attainment and compare programmes in terms of their rates of return.