When you extract an object, Photoshop erases its background to transparency. Pixels on the edge of the object lose the color components derived from the background, so they can blend with a new background without producing a color halo.
Use the more effective and flexible Refine Edge command
For superior results and nondestructive processing, use the Select > Refine Edge command. See Refine selection edges for instructions and links to additional helpful tutorials.
The Refine Edge command is particularly impressive with highly complex edge content such as wispy hair. Unlike the older Extract plug-in, which permanently erases pixel data, the Refine Edge command creates selection masks that you can later readjust and fine-tune.
Use the older, optional Extract plug-in (Windows only)
Note: The Extract plug-in is not available for
Mac OS because it is incompatible with recent versions of that operating
system, and the Refine Edge command produces better extractions.

Selected area highlighted and filled, and extracted object
After an extraction, you can add opacity
back to the background and create other effects by choosing Edit >
Fade Extract.

. You
also use the Brush Size option to specify the width of the Eraser,
Cleanup, and Edge Touchup tools.
, and
drag it over the highlight. To erase the entire highlight, press
Alt+Backspace (Windows) or Option+Delete (Mac OS).
. Click
inside the object to fill its interior. Clicking a filled area again
with the Fill tool removes the fill.
, and
click inside the object to sample the foreground color, or click
in the Color text box and use a Color Picker to select the foreground
color. This technique works best with objects that contain tones
of a single color.
. The
tool subtracts opacity and has a cumulative effect. You can also
use the Cleanup tool to fill gaps in the extracted object. Hold
down Alt (Windows) or Option (Mac OS) while dragging to
add back opacity.
. The tool
sharpens edges and has a cumulative effect. If there is no clear
edge, the Edge Touchup tool adds opacity to the object or subtracts
opacity from the background.