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We examine experimentally how the degree of position-momentum entanglement of photon pairs depends on the transverse coherence of the pump beam that excites them in a process of spontaneous parametric down-conversion. Using spatially incoherent light from a light-emitting diode, we obtain strong position correlation of the photons, but we find that transverse momentum correlation, and thus entanglement, is entirely absent. When we continuously vary the degree of spatial coherence on the pump beam, we observe the emergence of stronger momentum correlations and entanglement. We present theoretical arguments that explain our experimental results. Our results shed light on entanglement generation and can be applied to control entanglement for quantum information applications.