The phenomenon of `demographic dividend` refers to the positive impact that a country can experience when it has a large working-age population in comparison to the dependent population (such as children and the elderly).

Option 1 states that the demographic dividend relates to a sharp decline in the total population. However, this is not accurate as the demographic dividend is not focused on the total population but rather on the age distribution within the population.

Option 3 suggests that the demographic dividend is linked to a decline in infant mortality rate. While improvements in healthcare and a decrease in infant mortality rate may contribute to the demographic dividend indirectly, it is not the primary factor.

Option 4 states that the demographic dividend is related to an increase in the sex ratio. However, the sex ratio does not have a direct connection to the demographic dividend.

Option 2 correctly states that the demographic dividend relates to an increase in the working-age population. This is because a larger working-age population can contribute to economic growth, productivity, and innovation, leading to improved standards of living and economic development for the country.