[E]xtensions of emergency unemployment insurance benefits appeared to have raised the measured unemployment rate, relative to levels recorded in past downturns, by encouraging some who have lost their jobs to remain in the labor force. If that effect were large -- some estimates suggested it could account for 1 percentage point or more of the increase in the unemployment rate during this recession -- then the reported unemployment rate might be overstating the amount of slack in resource utilization relative to past periods of high unemployment.
I don't doubt this. I have at least one friend whose wife lost her job about 6 months ago and she is currently collecting unemployment benefits. To help make ends meet, the husband got a 2nd job (at a grocery store, a job the wife is easily qualified for) because if the wife went back to work, it wouldn't pay for itself with the loss of her unemployment benefits.
It seems strange, but in a world of two income families, this thing is bound to be quite common.
Update: David has a follow-up