An economic framework that melds the theories of human capital and internal labor markets in a probabilistic matrix has been developed to analyze teacher mobility. This framework is general and could be applied to other labor markets possessing similar institutional structures, such as those in the Civil Service sector. Several important implications of the framework were confirmed when tested by regression analysis and Markovian analysis with data for the San Diego school system. Four of these implications are: (1) Internal mobility of teachers is based on nonpecuniary differences between assignments (e.g., teachers in San Diego tend to move from schools where student socioeconomic status (SES) is relatively low to schools where SES is relatively high); (2) newly hired teachers tend to be placed in the lower SES schools; (3) teachers with the most experience are least likely to move between assignments; and, (4) higher SES schools have faculties with relatively greater experience and educational attainment than do lower SES schools, largely as a consequence of the three mobility patterns noted above. (Author)